Investors shouldn't chase the current FOMO-fueled rally in stocks, Wells Fargo warned.
Core inflation accelerated 0.2% in June, and though payrolls rose by a less-than-expected 209,000 jobs last month, the labor market remains resilient, a factor that could potentially drive inflation higher.
"If inflation's descent flattens out and reverses as interest rates rise higher, we believe the sectors that have driven this rally should be vulnerable to sharp pullbacks," Wren warned.
Wells Fargo predicted the S&P 500 would end the year between 4,600-4,800.
In addition to stubborn inflation, investors could also be slammed with a corporate earnings recession, Morgan Stanley has warned.
Persons:
Wells, Wells Fargo, Scott Wren, Wren, Morgan Stanley
Organizations:
Service
Locations:
Wall, Silicon