Wells Fargo slashes its S&P 500 price target, still expects an 8% rally

You can still expect an 8% rally in stocks this year.

According to Bloomberg, Wells Fargo equity strategist Gina Martin Adams cut her 12-month target for the S&P 500 by 6% to 2,100 from 2,245.

The S&P 500 opened at 1,937.90 on Thursday, and so Martin Adams' target implies that she sees stocks rallying about 8%.

But we now have yet another analyst at a major firm lowering their expectations after the year started on a sour note.

Bloomberg notes that Martin Adams cut her target due to lower oil prices and a flatter yield curve in anticipation of slower economic growth.

According to Martin Adams, the main thing that can drive stocks higher is a recovery in earnings.

Corporate America is going through an earnings recession, and fourth-quarter profits for S&P 500 companies are on track to fall 4.5%, according to RBC Capital Markets.

Martin Adams wrote that "commodity-sensitive" suspects like the energy sector would continue to limit market returns. If you excluded the energy sector, S&P 500 profits would be set to rise 1.4%

Head over to Bloomberg for the full story »

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