Credit Suisse expects the Federal Reserve to stop raising interest rates sooner than widely expected due to declining inflation.
According to the company’s chief US equity analyst, it will launch a strong market penetration.
“That’s actually what’s broadly priced in the market,” Jonathan Golub told CNBC.quick money“On Monday” each of us sees when we go to the gas station that the price of gasoline is going down and oil is going down. We see it even with food. So, it’s already showing up in the data already. And that’s really a huge positive potential.”
In the preview of a new note August CPI and PPI data for this weekGolub asserts that a “collapse” of inflation will occur over the next 12 to 18 months.
“Futures suggest that food and energy prices should fall -5.7% and -11.8% by the end of 2023, while commodity inflation has fallen from 12.3% to 7.0% since February,” he wrote. “Over the past year, service and rental prices have risen less than the core CPI (5.5% and 5.8% versus 8.5%).”
Golub expects signs of a collapse in inflation that will force the Fed to stop raising interest rates. Timeframe: Over the next four to six months.
“The market thinks it’s coming in the first quarter, if we continue down this downward trajectory where things are getting back to normal, they will either pause or signal they may pause,” he said. “If they do that, the stock market wants to move forward. The stock market is really going to take off.”
And now it might be a file Strategic time to look for opportunities. Golub especially loves Consumer GoodsAnd the IndustriesAnd the Integrated refineries and oil producers.
“The valuations in the market are somewhere between fair and inexpensive at the moment, which means there is more upside than the P/E multiple. [price to earnings] Multiples “.
golob Standard & Poor’s 500 year end The target is 4300, which means a gain of about 5% from Monday’s close. The index is up nearly 8% over the past two months. However, the Standard & Poor’s Index is still down about 15% from its high.
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