PCE data today: Sanctuary Wealth sees 16% upside in S&P500

S&P 500 is expected to open in the green today after the U.S. Bureau of Economic Analysis said the core personal consumption expenditures price index was in line with expectations in January.

Does S&P 500 have more upside from here?

For the month, Fed’s preferred inflation gauge came in up 0.4% versus a 0.2% increase in December.

The economic data arrives only days after Mary Ann Bartels – the chief investment strategist at Sanctuary Wealth said the S&P 500 could hit 5,800 level this year. But her view is based on more than easing inflation only.

Versus last year, the core PCE index was up 2.8% in January.

Fed to start cutting rates in coming months

On Thursday, the Bureau of Economic Analysis also reported the headline PCE at 0.3% for the month and 2.4% for the year - also in line with expectations.

Note that the benchmark index has already gained roughly 10% since the start of this year but Bartels’ year-end target suggests another 16% upside from here.

It is worth mentioning here that the in-line inflation data today may create more room for the U.S. Federal Reserve to start cutting rates from June as broadly expected.

That also factored into Mary Ann Bartels' view that "equities are going to trade very well and will still have a significant year-end rally".