A Wall Street veteran says the continuation o…

According to Mars Finance, on July 2nd, Bob Doll, CEO of Crossmark Global Investments, stated that the current US stock market is in a "high-risk bull market." With inflation consistently above the 2% target, for the market to continue its upward trend, two conditions must be met simultaneously: continued better-than-expected corporate earnings and the Federal Reserve maintaining a neutral or even accommodative policy. Doll pointed out that although oil prices have recently fallen, US inflation remains above the target level, and the current rate-cutting cycle may be nearing its end, with the possibility of another rate hike this year not ruled out. With valuations at historically high levels, the market's reliance on earnings and policy has significantly increased, resulting in a lower overall margin for error. FactSet data shows that institutional consensus expects the S&P 500 to rise approximately 21.2% over the next 12 months, with a target of around 8918 points. Second-quarter earnings growth is projected at 23.1%, potentially maintaining growth above 20% for two consecutive quarters. The current forward P/E ratio is approximately 20.1, slightly higher than the five-year average. Regarding monetary policy, the market is largely focused on the latest remarks from Federal Reserve Chairman Kevin Warsh. He did not provide clear guidance on whether there would be a rate hike in July, reiterating that the Fed will weaken forward guidance, emphasize reliance on economic data, and maintain its goal of keeping inflation back at 2%. His speech caused the yield on the two-year US Treasury note to fall to approximately 4.15%, cooling market bets on a rate hike this year. However, overall expectations still suggest a possible rate hike in 2026, while the baseline scenario favors maintaining interest rates unchanged until 2027.

A Wall Street veteran says the continuation of the US stock market bull run depends on the Federal Reserve's policy stance, with very little room for error.

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