The $1 reason to keep buying Netflix, one of the S&P hottest stocks

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Need to Know: Here's why a surging Netflix has even more room to run

It’s a big week in data with a glut of reports due to be released after being held up by the recent shutdown. For Tuesday, we’ve got housing starts, building permits, Case-Shiller home prices, consumer confidence and new home sales.for that dovish policy switch.“Little or no upside.” It’s a bit cheerless, but that’s what strategist Barry Bannister at broker Stifel Nicolaus thinks of the S&P 500 right now.

“The real fed funds [rate] is 0.6%, implying an S&P 500 trailing, 12-month p/e [ratio] of 17 times,” he said, adding that they see 2019 EPS of $162 plus 5% year-over year versus Wall Street expectations of around $167. Crunch all that together and he says the S&P 500 looks fully priced at around 2,750, which is equal to 17 times their EPS forecast for this year of $162.

To be sure, the S&P 500 has been struggling to hit a key resistance level of 2,800, which it tapped for the first time since early November on Monday, but got slapped down. Since the corrections started last Oct, this is the third time that the S&P touched the 2800 area. Will it be able to scare bears the third time?

 

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