Companies getting more tight lipped on earnings outlooks Bank of America Merrill Lynch lowered its year-end target for the S&P 500 for the second time since early September and warned that a lack of companies providing outlooks this earnings season could provide a headwind to the broader market. The S&P 500 SPX, -0.36% will likely end the year around 2,000 rather than a previously forecast 2,100, according to Savita Subramanian, Bank of America Merrill Lynch equity and quant strategist, in a Monday note. “While most of our models still point to further upside for US equities, the growth outlook has become less clear, and we see an increasing number of potential risks to our bullish outlook,” Subramanian said. “We continue to view the risk vs. reward for US stocks as attractive, but less attractive than the last several years, given the higher valuations and greater macro risk,” she continued. “Increasing divergence and uncertainty around global growth and central bank policies should keep volatility elevated, and we recommend that investors skew their portfolios toward larger market cap and higher quality stocks with strong balance sheets, while avoiding overowned areas of the market.” Back in early September, Subramanian had cut her price target to 2,100 from 2,200, citing the index’s fall from May highs and slowing global growth. The new target cut joins a chorus that has played out since stocks started diving into correction territory in late August. At the end of September, Wells Fargo cut their target range for the S&P 500, estimating the index would end up between 2,025 and 2,125. Similarly, Goldman Sachs lowered their price target to 2,000 from 2,100, and Morgan Stanley cut its 12-month price target to 2,200 from 2,275. Those levels are well down from fairly bullish forecasts made at the beginning of the year. In a separate note, Subramanian expressed concern this is shaping up to be a particularly opaque earnings season from companies in the grip of uncertainty. By her count, only 26 S&P 500 companies issued an outlook for the third quarter in September, well below the September or monthly average since 2000. Calling the level “disturbingly low,” Subramanian said that caution could cost companies as the stocks of companies who provide guidance tend to trade at a premium to those who don’t. It’s quiet out there. Almost too quiet. “While this datapoint alone may not be cause for alarm, the building loss of transparency from the S&P 500 amid a volatile market could cause the index to be more penalized than in a less fragile environment,” Subramanian noted. The S&P 500 is 7% off its May high of 2,134.72, while the 50-day moving average for the CBOE Volatility Index VIX, -0.72% has jumped 53% over the same period of time. More from MarketWatch