In the spirit of March Madness and the 2018 Final Four national semifinals, LPL Research has identified its “Final Four Factors” for the stock market in 2018. If you missed the team’s Sweet 16 picks, you can read about them here.
You won’t see any references to Kansas, Loyola, Michigan, and Villanova, the teams appearing in the Final Four matchup. What you will find, however, are insights regarding economic growth, earnings, trade policy, and the midterm elections.
LPL Research believes there will be a hard-fought battle between these factors. Along with it may be more market volatility. Yet, the team also believes we’ll still see the potential for solids gains for stocks this year and maintain our year-end fair value S&P 500 Index target 2950-3000.
Economic growth, earnings, trade policy, and the midterm elections may all have an impact on the stock market for the remainder of 2018. According to the LPL Research team:
To get the full story, download Stocks 2018 Final Four Factors.
*We believe 2018 earnings will be supported by stronger global economic growth, a pickup in business spending, strong manufacturing activity in the United States, and the new tax law. Our year-end S&P 500 fair value target range is 2950–3000 based on a price-to-earnings ratio (PE) of 19.5. We also project real gross domestic product (GDP) growth of around 3% in 2018. This is in line with historical mid-cycle growth of the last 50 years. Economic growth is affected by changes to inputs such as business and consumer spending, housing, net exports, capital investments, and government spending.