The S & P 500 surged to a new all-time high on Friday, confirming the stock market is in a bull market and suggesting the rally has further to go in 2024, ahead of a big week of earnings and inflation data. The S & P 500 rallied more than 1% on Friday, above both its closing and intraday records that it last reached in January 2022. The closing high established then was 4,796.56, while its intraday high was 4,818.62. The broader index ended the day at 4,839.81. For investors, it’s an encouraging sign for equities even amid lingering concerns of slowing economic growth. Some worry the major averages are overvalued after last month’s dovish pivot from the Fed has stocks pricing in more rate cuts than central bank policymakers have indicated. “There’s nothing bearish about new highs,” said Katie Stockton, founder and managing partner at Fairlead Strategies. “Meaning that when a major index like the S & P 500, like the Nasdaq 100, reaches a new all time high, what it does is, it clears the charts of resistance.” The bullish development would be a boon for more risk-on sectors, Stockton said, including information technology, communication services, consumer discretionary, as well as financials and industrials, all of which the technical analyst expects will outperform in a constructive market outlook. “In terms of duration, we’ve actually been of the belief that this year will be just generally a bullish year,” Stockton continued. Historical precedent Other technical analysts are optimistic about the equity market. According to historical precedent, Oppenheimer’s Ari Wald noted, in 13 out of the 14 other times since 1950 that the S & P 500 took at least a year to reach a previously set an all-time high, the broader index was higher 12 months afterward. In fact, Wald noted it was higher by a median gain of 13%. To be sure, he said, the returns one month out were in line with the average return, typical of a consolidation after a breakout. But, he said the returns…
2024-01-19 15:31:00
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