Why the S&P 500 could smash through 6,000 before year-end
October 21, 2024 (Investorideas.com Newswire) The S&P 500 hit a record high on Thursday - and the path to the never-reached-before 6,000 is now not just possible, but, likely, predicts the CEO of one of the world's largest independent financial advisory and asset management organizations.
The bullish prediction from Nigel Green of deVere Group comes after the Wall Street index last week registered a record high of 5,882.
He says: "The momentum in the market is palpable with savvy investors positioning themselves to ride the wave.
"We are in the middle of a blockbuster earnings season, and the results are nothing short of spectacular.
"The heavyweights of corporate America are stepping up, delivering the kind of earnings reports of which investors only dream. Financials have led the charge, with banks kicking off the season on a high note, pushing the Dow to its own record highs alongside the S&P."
As more top-tier companies report, it appears that the market is gaining further steam. Earnings are the lifeblood of stock market growth, and with companies consistently outperforming expectations, it's no wonder that investors are bullish.
"These results aren't isolated - they reflect a strong, resilient economy that's defying the pessimists. If you're not in the game now, you're missing out on one of the most powerful earnings rallies we've seen in years."
As if the earnings strength wasn't enough, there's another force pushing the S&P 500 higher - central banks.
"With inflation pressures cooling off, global monetary policy is moving into a more supportive phase. Major central banks are expected to continue to ease rates, with whispers of cuts growing louder by the day," notes the deVere Group CEO.
"Lower rates are a dream for equity investors. With cheap money flowing, companies can borrow, invest, and grow faster, and stocks naturally benefit.
"For investors, this is the kind of environment you wait for - a once-in-a-cycle opportunity to capitalise on a wave of liquidity."
US equities become the obvious choice. The Fed may be cautious, but markets are betting on more accommodation, and those bets are fuelling even greater upward momentum.
The other major global force propelling the market? China.
Nigel Green comments: "The world's second-largest economy has unleashed a powerful stimulus plan that's sending ripples across the globe. China's efforts to boost domestic demand, especially in critical sectors like real estate, are reinvigorating the global growth engine.
"This is also huge for companies. From consumer goods to tech and industrials, China's recovery means stronger demand for American exports and global supply chains roaring back to life. With China pumping liquidity into its own economy, it's creating a tidal wave that can be expected to lift all (or mostly all) boats - and the S&P 500 is positioned to benefit in a big way."
In the stock market, nothing drives prices higher like the Fear Of Missing Out - And right now, FOMO is setting in across the globe.
The psychological factor is massive. As each new high is reached, sidelined investors jump in, pushing the index higher. The risk appetite is back - and for those who are already in the market.
"As ever, the real winners in this market are the ones getting ahead of the curve. Smart investors are already positioning themselves to capitalise on the sectors leading the charge - tech, financials, and consumer stocks."
Tech is particularly ripe for gains, with AI and digital innovation continuing to disrupt industries and fuel earnings growth. Meanwhile, financials stand to benefit from stronger-than-expected earnings and a more favourable interest rate environment, and consumer discretionary stocks are riding high on resilient spending.
"The question isn't if the S&P 500 will hit 6,000 - it's when.," concludes Nigel Green.
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