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In his latest client note, Credit Suisse’s Chief US Equity Strategist, Jonathan Golub, revised up its year-end S&P 500 index target from 2700 to 3200, which is just over the US benchmark’s current level. This suggests that the 2020 rally in the index is almost over.

Key quotes (via Barron)

“Shelter-in-place restrictions have been rolled back, and the reopening process is well under way.”

“Consumer wallets are swollen with government funds, and economic data—including blowout retail sales and jobs reports—show broad-based sequential improvement.”

“Sees $125 in S&P 500 earnings per share in 2020, down from $165 last year. Golub doesn’t expect earnings to fully recover until 2022. But based on the rapid early pace of the economic recovery, on Monday he raised his estimates for the next two years’ EPS—to $155 from $150 in 2021 and to $170 from $165 in 2022.”

Meanwhile, “rock-bottom interest rates and the Federal Reserve’s effective backstopping of credit markets justifies a higher price-to-earnings ratio than at the start of the year.”

“A variety of factors are likely to hamper a full recovery, including: (1) logistical challenges in reopening public-transit cities such as NYC, (2) less air travel, and (3) job losses which will take years to fully recapture.”

“Economic progress is dependent on the extension of [the Paycheck Protection Program]and unemployment subsidies (at least in part), which have not yet been passed. Election-related tax uncertainties could negatively impact profit growth. Longer-term, debt burdens and a reversal of globalization have the ability to weigh on potential GDP.”