U.S. PCE data: Wells Fargo sees another 10% upside in S&P 500

All eyes are on the S&P 500 today after the Bureau of Economic Analysis said the core personal consumption expenditures price index was up more than expected in March.

S&P 500 outlook after PCE inflation data today

For the month, Fed’s preferred inflation gauge came in up 0.3% - in line with Dow Jones estimates. But the index printed up 2.8% for the year on Friday that trumped expectations by 0.1% (read more).

Still, Chris Harvey - the head of equity strategy at Wells Fargo expects the benchmark index to hit 5,530 by the end of 2024. Speaking with Bloomberg this morning, he said:

Note that his year-end target suggests about a 10% upside in S&P 500 that’s already up some 8.0% versus its year-to-date low at writing. 

Rate cuts may not affect the outlook for S&P 500

On Friday, the Bureau of Economic Analysis also reported headline PCE inflation at 2.7% versus 2.6% expected. For the month, it was also up 0.3% - in line with expectations.

Personal spending was up 0.8% in the United States last month versus a 0.7% increase expected. But a 0.5% increase in personal income matched forecasts. Wells Fargo’s Harvey also told Bloomberg today:

It is worth mentioning here that Fed chair Jerome Powell said monetary policy has to remain restrictive for longer in his speech last week.