The S&P 500 is on its way for yet another successful year with year-to-date return of 22%. With valuations once again at record highs and bond yields sitting well above their 2021 values, upside from here appears limited. Investors buying the SPY should also consider the ETF's higher risk exposure.
The S&P 500 wrapped up its best quarter since the fourth quarter of 2021. We have highlighted five stocks that led the ETF and have a solid Zacks Rank.
The stock market was able to rally last week despite the larger-than-expected 0.50% rate cut by the FOMC. As is often the case the averages gyrated after Fed Chair Powell's press conference and higher open the Dow Industrials closed down 293 points.
The S&P 500 tracker fund SPY has seen a healthy rise in 2024 so far, after already seeing a double-digit increase in 2023 and even has a slight lead over QQQ. Sustained above trend growth in the US economy, softening inflation rates and the start of the rate cut cycle go in its favour. From a top-down perspective, all its biggest ten holdings have performed well this year, led by NVIDIA along with Meta, Broadcom and Eli Lilly.
Peak optimism in stock markets often signals an impending decline, as seen with U.S. households' equity allocation hitting a record 34.7%. Professional and retail investors' extreme enthusiasm, with low cash reserves and high options activity, indicates a potential market downturn.
The S&P 500 index and its associated exchange-traded funds (ETF) like the SPY, VOO, and IVV, surged to a record high on Thursday as investors cheered the Federal Reserve boost. The blue-chip index soared to a high of $5,722, a 20% increase from where it started the year.
SPY: Equity And Bond Markets Flash Conflicting Signals On Recession Risk
ETFs offer all kinds of flexibility for investors and advisors, but for TappAlpha CEO Si Katara, they provided a particularly important type of flexibility – an opportunity for a career change. Katara left the software firm he co-founded, Headlight, in 2022 to spearhead the launch of TappAlpha early last year.
I maintain a “Hold” rating for the S&P 500, skeptical of the market's bullish expectations for a 50 basis point rate cut. The Energy CPI component deflation contrasts with rising rent and core services costs, complicating the inflation outlook and justifying a cautious Fed approach.
The stock market normally doesn't do well in September -- at least, historically. If stock prices fall, however, that could make this an opportune time to start buying.
After two negative expectation breakers in a month, it was nice to see the market break expectations the other way.
The reading of August CPI data led the market to sell off because it was as expected. As much hope as there was for aggressive interest rate cuts this year, the FOMC would unlikely follow through on them because underlying economic data remains solid, and deep in the market's heart, it knows it to be true.