The S&P 500 has had the longest rise since the beginning of the year! Will the market continue to be bullish?
The US stock exchange rate continued to grow on the 19th, $S&P 500 Index (.SPX.US)$with $Nasdaq Composite Index (.IXIC.US)$has been rising for 8 consecutive days, making it the longest upward phase since the beginning of the year. Since a series of economic indicators showed the solidity of the US economy, there was a rush of buying.
Individual stocks are also doing well, $NVIDIA (NVDA.US)$has risen close to 30% for 10 days, $Nike (NKE.US)$It rose 9 times in a row, making it the first long-term continuous high in about 8 years.
Four recently released economic data strongly supported market sentiment, and expectations that the US economy could achieve a soft landing have resurfaced:
●Declining trend in the inflation rate: The US consumer price index (CPI) in July rose 2.9% from the same month last year, fell below the forecast of 3%, and fell from 3% in June. This suggests that inflation is slowing down, and there is a possibility that it will give room for the Fed to cut interest rates in the future.
●Unemployment claims declined: The number of new unemployment claims last week was less than expected at 0.227 million. According to this data, the unemployment rate rose in July, but this may be due to seasonal changes in the labor market rather than an economic slowdown.
●Consumer spending growth: retail sales increased 1% in July, exceeding expectations of 0.3%. This shows that private consumption continues to be strong and supports the economic expansion phase.
●SME business confidence has risen: The SME Business Confidence Index has reached its highest level since February 2022, indicating that business owners are optimistic about future economic prospects.
Economists' views on the recession are also slowing. According to the latest survey, the majority of economists anticipate that the Federal Reserve (Fed) will cut interest rates by 25 points in the remaining 3 meetings in 2024, and although this has increased since last month, they think it is unlikely that the US economy will fall into recession.
According to Goldman Sachs's latest research note, the forecast for the possibility that the US economy will fall into recession was raised from 15% at the beginning of this month to 25%, then lowered to 20%.
Goldman Sachs economists said, “If the number of non-farm payrolls announced on 9/6 is strong, there is a possibility that the forecast will be lowered to 15%.”
The strong rebound in the US stock market gave rise to optimism, and there are many people who argue that the upward trend in the market will continue to be strong in the future.
According to Bank of America's latest institutional investor survey, despite global financial market turmoil, investors' optimism about major US technology companies has not weakened,Expectations for the economy's soft landing also reached 76%, up from 68% in July。
Scott Rubner, managing director of Goldman Sachs Group, said, “The stock market will hit an all-time high in the next 4 weeks and then enter a period of decline.” According to him, approximately 50% of companies will enter the lock-up period from 9/13, and many stocks will be bought during that time.
Mr. Lovner predicts that the S&P 500 stock price index will hit an all-time high by the end of the year. The target share price is 6,000, up about 7% from current levels. He said, “In November and December, the S&P 500 stock price index will hit a high in the fourth quarter. Also, after the US presidential election in early November, a record 7 trillion 300 billion dollar US MMF will flow into stocks and bonds,” he added.
However, since the sales wave in early August, there has been an overall downward trend in trading volume, and market concerns remain.
Nicholas Colas, co-founder of the research company Datatrek Research, pointed out that “at least until the volatility index (VIX) stabilizes below 19.5 (long-term average value), it is necessary to respect market uncertainty.”
JPMorgan believes that sales in early August are just a precursor to what will happen to the stock market in the future, and there is a possibility that sales will continue in the future due to concerns about economic growth.
Barry Bannister, a strategist at the major US investment bank Stifel, also urged investors to take a cautious stance.
He stated that “if the economic deceleration continues and the economy eventually falls into recession, inflation will remain high, so a bear market will arrive,” and he predicts that the S&P 500 stock price index will fall to 5,000 by October.
Federal Reserve (FRB) Chairman Powell is likely to suggest a September interest rate cut in his keynote speech on the 23rd at the annual symposium (Jackson Hole meeting) hosted by the Kansas City Fed. In the past few years, when Chairman Powell gives lectures at Jackson Hole, the US stock market has often been greatly shocked. In the options market, it is currently expected that the S&P 500 stock price index will fluctuate 1% or more on the 23rd.
Source: Bloomberg, Moomoo
This article uses automatic translation for some parts
-MOOMOO News Kouchi
This article uses automatic translation for some parts
-MOOMOO News Kouchi
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
Read more
Comment
Sign in to post a comment
