Pulse of the Market London Fog

RBC maintains a 7,900 target for the S&P 500 while noting that investors are finding sector selection difficult beyond the AI/Tech complex. The report highlights a preference for US equities and Overweight positions in Materials and Financials amid persistent geopolitical and inflation risks.

Key Takeaways

• 1.Investors are keen to find equity opportunities beyond the dominant Semis/Tech/AI trade but are struggling to identify viable alternatives.
• 2.RBC maintains a 12-month S&P 500 price target of 7,900, though macro stress tests suggest a range of 7,400-7,500 if yields hit 5% and inflation remains high.
• 3.US equities continue to be preferred over non-US markets due to superior earnings revisions and less direct exposure to Middle East energy disruptions.

Table of Contents

• London Fog
• In a Nutshell
• Quick Hits: What Else Jumps Out
• Summary / Update of Our US Equity Market Outlook
• Our Thoughts on Hot Topics
• S&P 500 Sector Snapshots – Consumer & Growth Oriented Sectors
• S&P 500 Sector Snapshots – Cyclical, Value & Old Economy Oriented Sectors
• The Four Tiers of Fear in Modern US Equity Markets
• Performance / US Large Cap Sectors
• Performance / US Small Cap Sectors
• Performance / US Style
• Performance / Factors
• Performance / Global Perspective
• Revisions & Earnings / Consensus Forecasts
• Revisions & Earnings / Reporting Season
• Investor Sentiment & Positioning / Broader US Equity Market
• Valuation / Our Trailing P/E Model
• Valuation / Stocks vs. Bonds Model
• Thoughts on the Middle East / Valuation
• Economy / US GDP Model
• Economy / Fed Model
• Policy & Politics / Election Sentiment
• Flows / US Equities vs. Bonds

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