Last December, Morgan Stanley's Adam Parker set an S&P target of 1167 on global GDP slowdown, weak corporate earnings, a rising dollar and companies' bearish inventory-to-sales ratios.
Butt he market has been strong, so has he thrown in the towel?
Today, he announced he is going 1167 or bust.
Here are his cases:
In case you didn't know, the S&P stands at 1457.
In a massive presentation on his year-end predictions, Parker explains why:
- Earnings growth is very poor.
- Earnings are volatile, and that's also ominous.
- Historically, extreme rates (both high and low) are bearish. Our current sub-zero interest rates are bad.
- Historic price-to-earnings ratios at this time of year suggest a downturn. "Investors are overpaying for cyclical earnings!" he exclaims, adding, "most industry groups appear to be over-earning right now."
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