According to the VESYNC APP, the risks brought about by the political turmoil in France and Germany have prompted Wall Street investment institutions represented by Citigroup to downgrade the rating of the European stock market. The undervalued European stock market, which has been bullish on strong fundamental blue-chip stocks since the beginning of the year, has recently fallen out of favor with Wall Street. In addition, Wall Street strategists are currently more inclined towards the U.S. stock market led by large tech giants, indicating that some funds attempting to enter European stocks may shift to U.S. stocks. Goldman Sachs, Evercore ISI, and other Wall Street institutions have recently raised their target points for the benchmark index of the U.S. stock market - the S&amp;P 500 Index. This year, the S&amp;P 500 Index may even have the potential to break through 6000 points (closed at 5431.6 points last week).
Since June, the S&amp;P 500 Index has repeatedly hit new highs, and the Risk On momentum in the U.S. stock market seems to be increasing. Wall Street strategists have recently intensified their Risk On stance, believing that the S&amp;P 500 Index will continue to set new historical highs. Global asset management giant BlackRock recently stated that it remains cautious about long-term U.S. Treasuries before the November U.S. presidential election. Due to the large fiscal deficit, investors may demand more compensation to hold U.S. bonds, but the institution emphasized that it will continue to increase its holdings of U.S. stocks before the U.S. election.
JPMorgan Asset Management predicts that the strong start of the U.S. stock market in 2024 is expected to continue into the second half of the year. David Kelly, Chief Global Strategist at JPMorgan Asset Management, and his team pointed out in their mid-year outlook report that although the S&amp;P 500 Index has delivered double-digit returns since January, market growth may be more steady than rapid. However, thanks to a solid corporate profit base, expectations of loose monetary policy by the Federal Reserve, and strong economic growth, the U.S. stock market is expected to receive significant boosts in the coming months.
<h2>European Stocks Abandoned by Wall Street</h2>
Strategists at Citigroup, led by Beata Manthey, have downgraded the overall rating of the European stock market from &#34;Buy&#34; to &#34;Neutral&#34;. The core logic behind this decision is the &#34;intensification of political risks&#34; and the high likelihood of further market breadth narrowing and decline. At the same time, Citigroup strategists have upgraded their rating of U.S. stocks from &#34;Neutral&#34; to &#34;Buy&#34;, emphasizing a focus on large tech giants and industrial stocks.
In a report, Beata Manthey and other Citigroup strategists wrote: &#34;We choose to raise our expected return rate and rating for the U.S. stock market because the value growth tendency of U.S. stocks is much higher compared to European markets, and it is more defensive during uncertain times.&#34;
&#34;The political uncertainty at the political level may temporarily cool the recent shift of American investors towards European stock markets.&#34;
French President Emmanuel Macron unexpectedly announced the early start of elections last week due to party pressure, triggering a sharp drop in the French stock market, which in turn caused the Euro Stoxx 600 Index to plummet for multiple days (French stocks have a very high weight in the Euro Stoxx 600 Index), leading to a total market value evaporation of about $258 billion in the French stock market. Amid investor warnings of further deterioration in the country's fiscal situation, the country's sovereign bonds also faced intense selling.
Investors are very concerned about the prospect of Emmanuel Macron's centrist, pro-business Renaissance Party losing more parliamentary seats in the two rounds of voting scheduled for June 30 and July 7.
Citigroup strategists wrote: &#34;The prospect of far-right forces holding a majority of seats in the French parliament brings significant economic policy uncertainty, raising numerous questions about French fiscal consolidation, funding for Ukraine, and European industrial policy.&#34;
The entire European market has been impacted, with the regional benchmark stock indices falling nearly 3% last week, significantly lagging behind the U.S. stock market. A week ago, Citigroup strategists predicted that the pan-European Stoxx 600 Index would further rise by 14% around mid-2025, setting a new historical high.
Nevertheless, the French market has begun to show signs of stability this week. Far-right leader Marine Le Pen has promised that if she wins big in the upcoming elections, she will cooperate with Emmanuel Macron to formulate policies, rather than abandon many important policies of the Macron era.
<h2>Under the leadership of the &#34;Magnificent 7&#34;, U.S. stocks are expected to surge to 6000 points</h2>
Other Wall Street investment strategists are also more optimistic about the outlook for the U.S. stock market. Goldman Sachs has raised its year-end target for the S&amp;P 500 Index for the third time, reflecting Wall Street's optimistic outlook on the strong performance growth of the &#34;Magnificent 7&#34; tech giants and the U.S. economic growth. Led by David Kostin, Goldman Sachs' stock strategist currently predicts that the S&amp;P 500 Index will close at 5600 points by the end of this year, higher than their February forecast of 5200 points.
Since the release of U.S. CPI data, the Dow Jones Index representing value stocks unexpectedly fell, small-cap stocks failed to rise, while the Nasdaq Index continued to hit new highs. The &#34;breadth&#34; of the U.S. stock market can be said to have failed to rebound, with incredibly strong performance, ample stock buyback ammunition, and the &#34;Magnificent 7&#34; holding a high weight in the S&amp;P 500 Index, making them the &#34;safest asset choice in the U.S. stock market and even the global stock market at present.&#34;
In the eyes of Wall Street investment institutions such as Goldman Sachs, the epic rise of the US stock market is not over yet. The &#34;Magnificent 7&#34; with a high weight in the S&amp;P 500 index continue to deliver strong performance, driving the robust growth of S&amp;P 500 index EPS this year under the leadership of the Magnificent 7. Positive factors such as the outlook for US economic growth are expected to propel the long-term steady rise of US stocks. Wall Street strategists are increasingly bullish on US stocks, with the majority choosing to raise target points for &#34;Risk On&#34; (i.e., &#34;chasing risk&#34;) rather than &#34;Risk Off&#34; (i.e., &#34;risk aversion&#34;).
So far, the factors driving the profit expansion of the S&amp;P 500 index have not changed significantly. It is still the &#34;Magnificent 7&#34; led by NVIDIA and Microsoft, just like NVIDIA (NVDA.US) driving the Nasdaq and S&amp;P 500 to record highs with its explosive quarterly growth performance announced in May. Wall Street strategists generally believe that at least until the end of 2024, the strong performance data of the &#34;Magnificent 7&#34; will continue to drive the overall EPS expansion of the S&amp;P 500 index and the trend of the S&amp;P 500 index continuously hitting new highs.
<img src="https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20240528/1716857376890385.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="1716857362(1).png" original-src="https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20240528/1716857376890385.png"/>
The &#34;Magnificent 7&#34; includes: Apple, Microsoft, Google, Tesla, NVIDIA, Amazon, and Meta Platforms. Global investors have been flocking to the seven tech giants since the first quarter of 2023 and 2024, mainly because they are betting on the optimal position for expanding revenue using artificial intelligence technology due to the huge market size and financial strength of these tech giants.
Evercore ISI, which has been bearish on the US stock market in the long term, recently completely reversed its stance and turned bullish on the future of US stocks. The firm's strategists expect double-digit gains in the US stock market by the end of 2024, with the S&amp;P 500 index setting one record after another. Julian Emanuel, Chief Equity and Quantitative Strategist at Evercore ISI, significantly raised the firm's year-end forecast for the S&amp;P 500 index to 6000 points.
Evercore ISI emphasizes that receding inflation and the AI boom led by tech giants will further drive the US stock market higher. &#34;Today, the potential of artificial intelligence is changing in every job and every industry. Slowing inflation, the Fed's intention to cut interest rates this year, and the economic resilience support the 'golden-haired girl' economy.&#34;
Strategists at RBC Capital Markets pointed out that if funds flowing into European equity funds deteriorate due to political uncertainty, US tech giants with ample stock buyback ammunition may benefit from this alternative &#34;safe haven seeking&#34;.
Stock strategists from Deutsche Bank also choose to be bullish on the future market of US stocks. The institution recently raised its year-end target for the S&amp;P 500 index from the previous 5100 points to 5500 points, emphasizing that there is a clear &#34;upward momentum&#34; for this target. &#34;If this consensus expectation continues to rise, and if the US economy exceeds expectations again this year, some believe that this could be the beginning of a prosperous period for US labor productivity with the help of AI, then it is not difficult to see the S&amp;P 500 index reaching 6000 points,&#34; Deutsche Bank strategists stated in their report

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Wall Street investment institutions have lowered their ratings on the European stock market and are now bullish on the American stock market. Wall Street strategists expect the S&P 500 index to continue to set new historical highs. Global asset management giant BlackRock has stated that it will continue to increase its holdings in US stocks. JPMorgan Chase predicts that the US stock market will maintain its strong momentum in 2024. Citigroup strategists have downgraded their ratings on the European stock market

1. Core descriptive facts: 
- Wall Street investment institutions, represented by Citigroup, have downgraded the European stock market due to political instability in France and Germany.
- Wall Street analysts are shifting their focus towards the US stock market, particularly large tech companies, and are bullish on the S&P 500 index, which may reach 6000 points.
- Global asset management giant BlackRock is cautious on long-term US treasuries but will continue to increase holdings in US stocks before the November presidential election.
- J.P. Morgan Asset Management predicts a strong start for the US stock market in 2024, with steady growth driven by solid corporate earnings, loose Fed policies, and strong economic performance.
2. Views and supporting logic:
- Wall Street is turning away from undervalued European stocks due to escalating political risks, narrowing market breadth, and the likelihood of further declines.
- In contrast, Wall Street analysts are increasing their rating on US stocks, particularly focusing on large tech companies and industrial stocks, citing higher growth potential and defensive qualities compared to European markets.
- The preference for US stocks is reinforced by the higher expected returns and defensive nature of the US market during uncertain times, potentially cooling off recent investor interest in European stocks.

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As the US stock market repeatedly hits new highs, Wall Street cheers "Risk On"! European stocks, mired in political turmoil, have become "abandoned children"