The top equity strategist at Barclays believes the S&P 500 offers a golden opportunity for long-term investors, predicting the SPX will soar to new all-time highs before the end of the year.
In a new CNBC interview, Venu Krishna, managing director and head of US equity strategy at Barclays, says: say the S&P 500 trades below a price-to-earnings ratio of 20x, allowing investors to accumulate shares at an “attractive entry point.”
According to Krishna, the bank believes that the conflict in the Middle East will not pose a headwind for the market in the long term.
“So I think our view broadly is that in the history of geopolitical risk over the last ten to fifteen years, most of it has been geographically contained and normalized relatively quickly. So you could say that the market has been somewhat coddled to follow that view. And the crisis in the Middle East is already broader in terms of Saudi Arabia, Oman, Bahrain, Kuwait, and so on. But I think the view is that there will be a resolution. And that is our vision. base scenario And that’s why we approached it from a scenario analysis point of view.”
Krishna predicts the S&P 500 will rise to 7,650 points by the end of 2026 as he believes the US can absorb the impact of higher oil prices as long as oil prices remain between $85 and $100.
“Fundamentally, I think the view is that the US economy is much more immune to this crisis compared to the rest of the world. Asia is the most exposed. To a large extent, so is Europe. But the US as a net energy exporter is in pretty good shape…
It will have some impact on consumption. And in fact, when we reach our 7,650, we assume that consumption will decrease. And we assume that global economic growth will take a hit. But we also assume that the US economy will be relatively more resilient. And that is how we arrive at those figures.”
But if the situation in the Middle East worsens, Barclays expects the S&P 500 to trade at 5,900.
At the time of writing, the S&P 500 is trading at 6,575, indicating approximately 16% upside potential if the SPX meets Krishna’s year-end target.
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