According to JP Morgan:US macro update – the big problem for this tape remains the same – a lack of catalysts. The fundamental landscape still isn’t as gloomy as it’s being made out to be but this won’t become apparent for several more weeks at least. It still seems like downside risk from present levels is minimal but the market needs clarity on two big issues (China growth and Fed liftoff timing) before it can materially bounce (remember: the recent bout of instability can trace its bloodline back to the 8/17 CNY devaluation while the Fed’s indecisive and muddled message on 9/17 only exacerbated the market’s angst). The SPX prob. can’t do any better than flat for the year although that would still mean ~100 points above present levels.
I don’t think any firm knows where the market is going but I have a lot of respect for JP research. The biggest challenge I have to valuing the market is that value doesn’t seem to matter. Apple trades at 8 times earnings ex cash and Under Armour trades at a hundred P.E.