Conclusion
Policy uncertainty is high, especially on trade. We have reduced earnings estimates to acknowledge the increased risk of a prolonged trade conflict. We remain optimistic that these trade disputes can be resolved this summer, though probably not until more economic pain is inflicted on the U.S. and China economies.
That doesn’t mean stocks won’t add to last week’s gains. We remain confident in our forecast for year-end fair value on the S&P 500 in the range of 3,000. It may be a grind as the U.S. economy muddles along, but fundamentals for equities remain favorable.
John Lynch is chief investment strategist at LPL Financial.