How the 'year of global rate cuts' pushed the S&P 500 to 5,750: Morning Brief

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The U.S. economy is so strong that even the most bullish Wall Street strategists have underestimated this year's equity return.

So says Jay Hatfield, founder and chief executive officer of Infrastructure Capital Advisors. In an interview with Yahoo! Finance this week, he said he thinks the S&P 500 will reach 5,750. That's higher than Wells Fargo's resonance Harvey's forecast of 5,535 this week.

"The U.S. economy is a Big Mac," Hatfield said in an interview this week, fueled by artificial intelligence, housing shortages and relatively cheap natural gas." So the U.S. advantage is so profound, it's a very unusual cycle."

Hatfield said the U.S. looks more impressive than Europe. He said that with the economy stagnating, the European central bank may cut interest rates before the United States, followed by the Bank of England. This may bring pressure to the dollar to rise in value, and because of the dollar and commodity prices, which in turn will cause deflation.

"Even if our economy continues to be strong, there is a case for the Fed to cut rates in July," Hatfield said.

In turn, this could push the 10-year Treasury yield down to 3.25% this year-an expectation that is even further from consensus than Hatfield's bullish S&P 500 forecast. He believes the 10-year yield will reach this level due to downward pressure in global bond markets.

"We predict 2024 will be the year of global interest rate cuts," he wrote in a recent note to investors.

Veteran strategist and economist Ed Yardeni is also bullish on the dollar, but his target is not as high as Hatfield's. He said in an interview with Yahoo! In an interview with Yahoo Finance, he said he was sticking with 5400 as his year-end forecast.

Despite this, he, like Hatfield, believes that the U.S. economy continues to defy gravity.

"It's certainly not a hard landing, nor is it a soft landing. It looks like the US economy is doing quite well.

If economic growth continues to fuel earnings, then the specific number of the S&P 500 will be more or less irrelevant to most retail investors. It's the曏 that counts - and these strategists agree that it's higher.

Julie Hyman is the author of the Yahoo Finance Live) ProgramsUnion Heel Anchor Program time is in the U.S.9am-11am EST weekdayspoint (in space or time)The Please.On Twitter @juleshyman Concerned about her. (math.) genus(archaic) Read Her other reports.