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Trends & Analysis
News

Crude oil dips for 3rd session after supply data

News

Is there an AI upside for AMD?

News

GBP/USD recovers following wage report

News

Buy the JPMorgan dip?

News

Goldman Sachs shares surge after earnings beat

News

Keep an eye on these key S&P 500 levels

Asset Watch

S&P 5,000 and beyond?

Thursday, February 1, 2024

The bull market has intensified on Wall Street, as Big Tech and AI optimism help fuel record highs for the S&P 500. And with macroeconomic risks abating, BlackRock – the world’s largest asset manager – expects the stampede to continue in the months ahead. A team of strategists led by Jean Boivin wrote on Jan. 29:
“Markets are pricing a soft economic landing where inflation falls to 2% without a recession. With markets tending to focus on one theme at a time, this narrative can support the rally over our tactical horizon and allow it to expand beyond tech.”
While decelerating economic risks and robust technicals create a bright backdrop for stocks, it’s prudent to remain vigilant if history repeats itself.

When the S&P 500 broke out to all-time highs in 2018 and 2020 after experiencing material drawdowns, corrections unfolded soon after. The index suffered a major decline in 2018, while the pullback was more modest in 2020. As there’s a similar pattern present now, the S&P 500 could surprise investors and follow a similar path.

To play it, you should monitor the index’s 20-week moving average. After a break below in 2018, it became resistance en route to new lows. However, it also held as support in 2020 and continued to do so throughout the 2021 bull market. The outlook remains constructive as long as the S&P 500 trades above it.

So, is 5,000-plus a done deal in the weeks ahead, or does a correction unfold first?


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