The nature of this year’s stock gains suggests they will continue, according to a J.P. Morgan Private Bank executive.
In a new interview on CNBC, Stephen Parker, the bank’s co-head of global investment strategy, says his base case for the S&P 500’s end-of-year target is 7,800, but his bull case is 8,900.
“The rally that we’ve seen this year has been entirely earnings-driven. Even the most bullish expectations have been consistently exceeded, and we think that earnings momentum is going to continue until the end of the year. So if you look at our base case target, that’s actually implying lower multiples from here. If you even get multiples that stick where they are with that earnings growth, that 8,900 number is achievable.”
The S&P 500 is trading at 7,472.12 at time of writing.
Parker says there are expectations that 8 of the 11 sectors in the S&P 500 will deliver double-digit earnings growth.
The bank executive notes that any sign of a fundamental slowdown in 2026’s capital expenditure story would undermine confidence in their expectations.
“But we don’t see that happening. The bigger risk would be if all of a sudden it wasn’t the fundamentals but rather optimism, exuberance, animal spirits creeping in. That would make us nervous. If multiples became a bigger part of the growth story than earnings, then we would probably get a little bit more concerned.”
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