Wells Fargo cuts estimates for stocks

Bloomberg

Wells Fargo cut estimates for stocks next year on concern the Federal Reserve is making a policy mistake that will throttle economic growth.
Chris Harvey, head of equity strategy at the bank, cut his year-end target for the S&P 500 Index to 2,665 from 3,079. While new forecast represents a 10 percent gain from current levels, he replaced Michael Purves at Weeden & Co as the biggest equity bear among str-ategists tracked by Bloomberg.
The reduction came after US stocks plummeted following remarks from Fed Chairman Jerome Powell in which he downplayed the recent market turbulence and said the central bank doesn’t plan to alter efforts to reduce its balance sheet. Policy makers increased borrowing costs for the fourth time this year, defying pressure from President Donald Trump, while dialing back projections for interest rates and economic growth in 2019.
“The message from the equity market seems to be that the Fed has committed a significant policy mistake and we wouldn’t disagree,” Harvey wrote in a note to clients. “The die has been cast and the odds of an accelerated slowdown have just increased.”
A less dovish Fed means lower equity valuations and possibly a worsening economy, according to Harvey.