S&P 500 Hits Record High Despite Recent Volatility
Top Investment Experts Predict Continued Upside for US Stocks
The S&P 500 has reached a new record high, defying recent volatility and concerns about its ability to make further progress in 2024. However, leading investment strategists argue that the index still has room to grow, citing factors such as lower interest rates, positive economic growth, and strong corporate earnings as reasons for continued optimism. While the market took a breather after a strong rally at the end of last year, experts believe that this pullback is a healthy correction and expect another year of gains for US stocks.
1: Lower Interest Rates and Positive Economic Growth Support Upside for Equities
UBS strategists, led by Solita Marcelli, the investment chief for the firm’s global wealth management arm, believe that lower interest rates, positive economic growth, and growing corporate earnings will provide support for modest further upside in equities. Despite concerns about the market’s rapid rally at the end of last year, UBS remains optimistic about the S&P 500’s potential to break new ground.
2: US Stocks Expected to Drift Higher on Resilient Economy and Corporate Earnings
Keith Lerner, the chief market strategist at Truist, agrees that US stocks will continue to drift higher due to the resilience of the economy and corporate earnings. Lerner sees the recent pullback in the S&P 500 as a necessary correction after a period of overextension. He believes that the bull market is still intact and expects another year of gains for US stocks.
3: Historical Patterns and Positive Omen for US Stocks
Brian Belski, the chief investment strategist at BMO Capital Markets, points to historical patterns and positive omens for US stocks. He notes that strong price momentum, like the fourth quarter rally, tends to be a positive sign for the stock market in the next six to 12 months. Belski also challenges the notion that a lackluster January predicts a negative year for the market, highlighting that positive January performances are more meaningful indicators of full-year performance potential.
4: Investment Ideas for Stocks Entering Uncharted Territory
UBS, Truist, and BMO Capital Markets provide investment ideas for stocks entering uncharted territory. UBS recommends high-quality stocks with healthy balance sheets and sound earnings, particularly in the US technology sector. Truist advises sticking with US large caps, driven by the positive price momentum of the tech sector. BMO highlights the opportunity in underperforming stocks, which historically tend to outperform in the remaining months of the year.
Conclusion: Despite recent volatility and concerns about the S&P 500’s ability to make further progress, top investment experts remain bullish on US stocks. Lower interest rates, positive economic growth, and strong corporate earnings are expected to support modest further upside in equities. Historical patterns and positive omens also suggest that the bull market is still intact. Investors are advised to consider high-quality stocks, US large caps, and underperforming stocks as potential opportunities in the current market climate.