The era of quantitative easing has been marked with historically low volatility, which is due in part to the predictable nature of Fed policy. Credit Suisse says that the macro world has come to life now in recent months and that it expects this awakening to continue over 2015, with changes in both relative economic performance and monetary conditions across regions driving major shifts in capital flows and asset pricing.

The main point is the firm’s 2,200 price target for the S&P 500, a rise of about 8.3%. What is interesting on top of that upside call is what the firm sees happening in the second half of 2015.

However, it can be assumed that by the nature of these economic changes, they will be uncertain and rarely orderly. To further personify this idea, the Credit Suisse Fixed Income Strategy & Economics Research Team said, “As the cold fronts from some central banks collide with the warm fronts from others, at the very least, we expect more market storms than seen in the past years.”

Credit Suisse expects the divergence in short rates between regions to widen further and the U.S. dollar to continue to rise against most currencies. Credit markets are expected to outperform while remaining volatile, and securitized products are expected to benefit from better fundamentals, as well as some positive technical.

The key take away from this report for investors is that the S&P 500 is expected to rally to 2,200 by the mid-year, notwithstanding an increase in volatility. For the second half of the year, it is expected to give up some of the gains as the Fed policies come into play.

ALSO READ: The 5 Most Revered DJIA Stocks Since the V-Bottom

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.