Sevens Report sees 'a credible path' for S&P 500 to rally another 5-10%
reached new record highs to start the week, driven by easing geopolitical tensions overseas, a decline in consumer inflation expectations, and reduced concerns surrounding the French elections following recent voting results.
The market then drifted sideways in slightly positive territory for the remainder of the session, ending with a small gain. S&P 500 earnings for 2025 are projected to be around $270 per share, significantly higher than the $243 estimate for 2024. While the upcoming earnings season could alter these numbers, they are currently intact.
According to Sevens, this change impacts investors in two key ways. First, it does not eliminate the risk of a correction or pullback. The markets remain aggressively optimistic about a soft landing, aggressive Fed rate cuts, and resilient earnings. The net result is a high multiple, still around 20X. If growth slows more than expected or earnings fall, the market will drop. Second, this earnings shift makes the year-to-date gains"stickier" in the event of a mild pullback.
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