What You Need to Know
- Despite the delta variant, LPL Financial still sees the S&P 500 continuing higher though year-end.
- Market dips should be short-lived and seen as buying opportunities.
- LPL continues to forecast 2021 U.S. growth within the range of 6.25% and 6.75%.
The delta variant of COVID-19 may have put some jitters into the market, but Barry Gilbert, asset allocation strategist for LPL Financial, says in a recent economic outlook that he is cautiously optimistic, both in seeing the S&P 500 continue higher through the end of the year and the variant having a limited effect on the economy.
From a market perspective, not all the news surrounding the delta variant has been bad, he states.
“We may even be close to the inflection point where much of the bad news has been priced in and markets start looking past the Delta variant’s growth impact. Markets tend to lead the economy, not the other way around,” Gilbert states in his Aug. 9 update.
He notes that although we are “in a very different place right now” than March 23, 2020, when the S&P 500 bottomed out, “we have not seen a substantial Delta-related pullback yet, only rotation toward some less risky areas of the market, so there may still be bumps ahead. But we think any dips in stock prices are likely to be short-lived and it may not even take all that much clarity before we see some rotation back to the market sectors that would benefit most from reopening.”