Why JPM Now Thinks The S&P 500 Is Promptly Headed For 2,200

Tyler Durden's picture

The S&P 500 is less than 50 points away from 2,200. That number is notable: in addition to that being Goldman's year end price target - for 2017 that is - it also the combination of two important digits: 17 and 130, which are what JPM thinks are the PE and EPS bogeys that the market is currently aiming for. It is also why JPM's trading desk commentary now expects that the S&P500 will hit 2,200 in short notice.

From JPM's Intraday update:

Market update – more of the same for this market. The 17x/$130 argument continues to resonate (that combination of numbers points to 2200). It’s still very, very early in the CQ2 season but the indications so are more positive than negative (AA, Daimler, PEP, Samsung, SIMO, STX, WDC, etc) and that is helping investors look past the earnings recession and is bolstering confidence in a ~$130 number for next year. In terms of macro news, there wasn’t a lot out in the last 12-18 hours. On Fri stocks rallied b/c of low bond yields and this week they are extending those gains despite bond weakness (i.e. yields are higher). For the first time in a while there is genuine evidence of a rotation trade underway w/money moving out of safe-haven areas and into cyclical ones. Investors are hesitant to embrace this trend wholeheartedly given all the recent head fakes and ahead of a busy month of central bank meetings. However, while the BOE (7/14) and BOJ (7/29) are expected to ease, policy expectations in aggregate are prob. too dovish (the ECB and FOMC are likely pretty happy w/the post-Brexit market reaction and don’t have any incentive to hint at further easing right now) and thus the risk for rates is for them to move higher in the coming weeks (which should help further a further safety vs. cyclical rotation).

2,200 it is then.

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HedgeAccordingly's picture

Moar buyers vs sellers.

101 years and counting's picture

but, the JPM QUAINT said under 1980.....

TradingIsLifeBrah's picture
TradingIsLifeBrah (not verified) 101 years and counting Jul 12, 2016 12:05 PM

That guy has been consistently wrong since his second post.

Bank_sters's picture

Update from the oil patch.  How the economy is adding job given the carnage of the shale industry requires the complete suspension of disbelief.   I ofter wonder as I watch business collapse, how long before this debt nightmare blows up?

magnetosphere's picture

hehe it's not really possible to grow the economy when oil production is declining

jakesdad's picture

fed put is in full effect through election!

analyst123's picture

at this rate, i'd say 2200 by friday morning lol

nakki's picture

I think $130 just might be possible in this NON GAAP world. In the one I grew up where businesses had to make real profits $90 GAAP seems more likely. Thank god fraud has become legalized so that mark to fantasy earnings make "the market"" look cheap at 17x earnings. Forget for a moment that GAAP earnings are "fraudulent light" earnings and that mark to fantasy go into those earnings, and take JP'S word that its all good.

I think I'll buy some Enron and WorldCom on any pullback, and add to my Tesla and Amazon holdings.

slaughterer's picture

Can't we still double dip to Brexit lows of ES 2000?  A double head fake here would be the most painful combination, hurting the most market players.

TheRideNeverEnds's picture

Logically it must trade 2200 as that price lies between the current price and where we are going, infinity.

inosent's picture

This looks like a play to keep the market bid to work the 82% odds favoring the incumbent party. Shorting next week might work out as long as there are fresh new highs on the 19th/20th. There will be a fade, the question is, do we fade from an all time high, or just a whatever fade, that leads to new highs between 9/1 and 11/1.

I expect the latter.

The only time this gambit did not work out was 1968 (Nixon) and 1980 (Reagan). So, despite the anti-Christ zio Beast pulling out all the stops (literally, haha), given the current framework, I think DT has a better than even chance to be another exception.

Anyway, shorts @2200 1st time it hits should be $$. Might not get rich on the trade, but it beats losing :)

hotrod's picture

Fed really wants Hillary elected.  4-8 more years of Obama policy.  Hope people see through it

Redart's picture

Excuse me, rectification, 2222.25, it's much more pretty

snakehead's picture

This is where the chopper money is going. Into overvalued stocks.

scubapro's picture



WOW  what a bold prediction...that the mkt might go up 2.5%!!!  this guy is a genius!   and I esp love how he justifies it by claiming "earnings" will go higher--such insight!!      

cmon bring on those dismal bank earnings...bullish for more stimulus--its done wonders for the economy so far

slaughterer's picture

Didn't Soros and Icahn go massively short a while back?  Are they just senile now?

Tic tock's picture

huhn, 'cos I figured the top was in , timing

huggy_in_london's picture

These guys are all jokers. So at 2000 they weren't saying it.. now they are.... ok whatever. Imbeciles.

CJgipper's picture

They learned an important lesson about fighting the feds valuation of fiat currency.

Ghostdog's picture

Calling for a massive 2.3% rally is really going out on a limb

wisebastard's picture

somewhere along the line i heard that the V shaped recovery pattern means that the market will be 10-15% higher in the next 8 months or so, with that said, markets tend to be somewhat predictiable but sometimes they are not...............maybe its high frequency trading....or we are all full of shit