Jim Lacamp, a senior vice president at Morgan Stanley (MS) Wealth Management, says that investors should avoid pulling their money out of the stock market, even though things feel shaky. In a CNBC interview, he compared today’s market to riding a “rodeo bull” because policies change quickly and can cause sudden swings. Even so, he believes that the overall setup is still healthy. He pointed out that it’s very rare for a major market downturn to happen when interest rates are falling, company earnings are rising, and the Federal Reserve is cutting rates. Because of this, he warned investors not to panic sell.
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At the same time, Lacamp highlighted that a positive shift is happening beneath the surface. Indeed, in recent years, market gains were mostly driven by a small group of big tech stocks known as the Magnificent Seven. Now, however, strength is spreading more evenly across the market. Sectors like biotech (XBI) and banking (KBE), along with smaller companies (IWM), are all moving higher. He added that less regulation is helping smaller firms, and that earnings are expected to grow by 17% for mid-sized companies and by 19% for small ones this year.
Still, Lacamp made it clear that risks remain. He said that the government is trying to keep the economy running hot while also leaving room for the Federal Reserve to keep cutting interest rates, which is a very narrow path. Moreover, his biggest concern is whether inflation can stay under control. If inflation rises too much, it could force the Fed to stop cutting rates, which would be more damaging to markets than short-term volatility. However, if courts were to strike down current tariffs, he said that would likely create a buying opportunity rather than a reason to worry.
Is SPY Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on the SPDR S&P 500 ETF Trust (SPY) based on 410 Buys, 83 Holds, and 10 Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average SPY price target of $802.14 per share implies 16.4% upside potential.
