EDITOR'S NOTE
Short-term market sentiment is being driven by headlines on the coronavirus, especially after a historic run that stretched equity valuations to extreme levels.
The death toll in China from the deadly virus reached 361, surpassing that of the 2003 SARS outbreak, while a first death outside of China was reported in the Philippines.  But Wall Street investment banks are telling clients to buy the dip. They believe the fast-spreading virus could slow global economic growth, but ultimately they believe it will be a short-term event lasting a couple quarters at most.
Market analysts from major financial institutions including Morgan Stanley, JPMorgan, UBS and Credit Suisse are all sticking with their bullish year-end targets for the S&P 500, seeing the China virus as a short-term risk rather than a threat to derail the record-long bull market.
"The fundamental backdrop is supportive, in our view, and the fallout from the outbreak is unlikely to hurt [economic] activity prints over the medium term," said Mislav Matejka, JPMorgan's head of global and European equity strategy.
The market strategists are betting on an earnings rebound this year. At the same time, strong economic fundamentals and an accommodative Federal Reserve will help offset the global health risk, they said.
Mike Wilson, Morgan Stanley's head of U.S. equity strategy, believes the correction will be contained to 5% in the S&P 500.
"The virus development should not derail the recovery," Wilson said.
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Senin, 03 Februari 2020
Dow rebounds | How high can Tesla go? | Latest on coronavirus
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