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Illustration: Sarah Grillo/Axios

Within the span of a week, three of Wall Street’s most prominent forecasters have told clients the stock market is heading higher than they previously thought.

Why it matters: A lot of people look to these folks for guidance. Not just clients, but also the investors who read the media coverage of this research.

  • Since the beginning of the year when these strategists initially published their year-end targets for the S&P 500, the index has gone from 3,756 to 4,429 as of Thursday, a gain of 18%.
  • Their calls come at a time when markets are trading near all-time highs, leaving investors wondering if this is a peak or if things will keep going up from here.

By the numbers: On Thursday, Goldman Sachs’ David Kostin raised his year-end S&P 500 target to 4,700 from 4,300. He raised his earnings per share estimate to $207 from $193, acknowledging that companies have been more profitable than he had anticipated.

  • Oppenheimer’s John Stoltzfus raised his target to 4,700 from 4,300 three days earlier. He raised his EPS estimate to $196 from $175, noting that revenue and earnings have held up impressively despite the spread of COVID-19 variants and ongoing supply chain issues.
  • Deutsche Bank’s Binky Chadha offered a less rosy assessment when raising his target to 4,500 from 4,100 last Friday.
  • "We continue to look for a notable correction as macro growth peaks," Chadha warned. Though he raised his EPS estimate to $210 from $202, making him the most bullish of the group from a profitability perspective.

What they’re saying: "As long as I have been in the business, the end of 2Q EPS season has been the time of the year the sell-side initiates EPS and targets for next year and tweaks their second-half numbers as well," Real Money columnist Helene Meisler tells Axios.

  • "So mostly I think, ‘Sure, it sounds like they are getting bullish near the highs,'" she says. "But I think it's actually quite a seasonal thing they do."

The bottom line: Not even the most sophisticated, well-resourced, full-time equity strategists can predict with precision where the stock market is heading over the next year.

Go deeper

A bond market peak

Data: ICE BofA via FRED; Chart: Axios Visuals

Financial markets have hit a lot of peaks this year — everything from monster year-over-year earnings, unprecedented fiscal and monetary policy support, and weekly stock market milestones.

Driving the news: Corporate bond prices were no exception — leading to record low yields. But that trend has started to reverse course.

Dan Primack, author of Pro Rata
2 hours ago - Economy & Business

FTX CEO predicts more U.S. crypto flight

Photo: "Axios on HBO"

FTX doesn't look much like a company valued at $25 billion. Its new headquarters, located in a sleepy part of The Bahamas, is so nondescript as to not even have a sign. But it does expect to soon have neighbors.

Driving the news: Founder and CEO Sam Bankman-Fried tells "Axios on HBO" to expect "more and more crypto flight from the states" if the U.S. doesn't soon create a regulatory regime for cryptocurrencies.

Developed countries reveal $100 billion climate finance plan ahead of COP26

Alok Sharma, head of the UN Climate Summit in Glasgow, speaks in Paris on Oct. 12. ( Li Yang/China News Service via Getty Images)

After 12 years of fits and starts, industrialized nations on Monday put forward a detailed plan to provide at least $100 billion annually in climate aid to developing countries starting by 2023.

Why it matters: The plan, presented by representatives of Canada and Germany, is aimed at defusing one of the biggest sources of tension at COP26, which is the failure of industrialized nations to follow through on their financial commitments.

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