Main financial assets discussed: Invesco S&P 500 Equal Weight ETF (RSP), Vanguard S&P 500 ETF (VOO)
Top 3 key points:
1. The S&P 500 has seen large gains from a few highly weighted stocks, leading to a concentrated market rally.
2. The Invesco S&P 500 Equal Weight ETF (RSP) offers a more diversified approach by equal weighting the stocks in the S&P 500 index.
3. Despite underperformance in the first half of the year, the author recommends buying RSP due to the potential for a rebalancing effect and historical evidence of the long-term success of equal-weight strategies.
Recommended actions: **Buy** RSP
The S&P 500 Index reached a high in July but has since experienced a pullback of -4.8% in the first three weeks of August, with further downside possible, although the market may be near a turning point.
The S&P 500 has fallen nearly 5% in August, and opinions on whether stocks will rebound are divided among Wall Street firms and market commentators, with some, like Goldman Sachs and Fundstrat, remaining optimistic while others, including Michael Burry and David Rosenberg, are bearish.
The S&P 500 is nearing a new bull market, potentially leading to stock market growth, and investors should consider stocks like Amazon and Mastercard based on the holdings of Wall Street billionaires and their solid growth prospects.
The S&P 500 is showing signs of a new bull market, but some experts are cautious and want to wait until the index reaches its previous high, meanwhile, there are two stocks, Sea Limited and Upstart Holdings, that have the potential to more than double in value over the next 12 to 18 months based on analysts' price targets.
In July, capital inflows from venture capitalists in the crypto sector decreased by 10.26%, with $700 million raised, as macroeconomic conditions and geopolitical events continued to impact investment decisions, although some notable outliers, such as Polychain Capital and CoinFund, launched new funds totaling millions of dollars, and the potential approval of spot Bitcoin exchange-traded funds (ETFs) in the U.S. could bring renewed attention and capital into the industry. Infrastructure and Web3 sectors received the most capital inflows, while overall investor activity in the blockchain industry remained low, suggesting a slow return to a steady upward trend.
The S&P 500 has recovered 65% of last year's bear-market drop, but when adjusted for inflation it is only about 45%, highlighting the diminished buying power and implying implications for the economy and future Federal Reserve policy.
The S&P 500 is close to reaching a record high, signaling the upcoming arrival of a new U.S. bull market, and investors should consider buying stocks like Roku and Datadog that have strong growth potential.
The S&P 500 has rallied in 2023 due to factors such as cooling inflation, a strong economy, and a positive outlook for earnings, but concerns over credit market volatility, monetary policy uncertainty, and steep valuations pose risks to the bull market rally.
The end of a five-month win streak for the S&P 500 is not all bad news, as historical data suggests that after five months of gains, the S&P 500's forward performances six and 12 months later are on average up 82% and 93% of the time, respectively.
The S&P 500 could experience significant gains in the coming months following the end of the current rate hike cycle by the Federal Reserve, with historical data showing positive returns after previous cycles and strong economic indicators supporting this trend. Investors are advised to consider investing in an S&P 500 index fund or industry-leading stocks like Amazon.
The S&P 500 index has seen impressive gains this year, up over 17%, and could potentially reach 5,000 points by the end of 2023, according to expert Andrew Slimmon of Morgan Stanley. Despite a slight pullback in August, strong third-quarter earnings and investor interest in mega-cap tech stocks are expected to drive the market forward.
The fundamentals and technicals support a demographically driven bull market in stocks until 2034, but potential risks include inflation, interest rate-induced debt crisis, and refinancing problems, which could lead to a drop in the stock market. Comparing the S&P 500's score in August 2023 to historical patterns, the market seems confident and not indicating an imminent debt crisis or severe recession. Credit spreads also appear tame compared to previous crisis periods. However, the article notes the possibility of abrupt changes in the market and encourages openness to a wide range of outcomes.
Despite economic challenges, the S&P 500 is expected to continue its strong growth, potentially increasing by as much as 11% as the summer season ends, driven by companies like Apple, Microsoft, Google, Amazon, Nvidia, Tesla, and Meta, according to Morgan Stanley analyst Andrew Slimmon.
Investing in the stock market can be simplified by buying high-quality businesses at reasonable valuations and holding them for the long term, and index investing in low-cost funds that track the S&P 500 can outperform professional fund managers while eliminating the need for complex decision-making.
Bank of America's technical strategist believes that despite historically poor September performance, the S&P 500's year-to-date rally positions it for further gains, with the potential for an 8% climb by the end of the year.
The top 25 stocks in the S&P 500 outperformed the index in the 35th week of 2023, with tech stocks leading the way, suggesting a return of bull markets and a decrease in recessionary fears; however, market health, the balance between developed and emerging markets, and investor behavior still need to be addressed. Additionally, market correlations have dropped since COVID, and on "down-market" days, correlations are 5% higher than on "up-market" days. Market correlations also decrease during upward economic cycles. Retail investors are showing a preference for dividend-driven investing and investing in AI stocks. The global subsidies race is impacting valuations in tech and leading to supply chain inefficiencies. As a result, there are opportunities for diversification and investment in a wide variety of equities and bonds.
The S&P 500 Index experienced its best week since June, while Bitcoin faced a marginal loss due to the delay of spot Bitcoin exchange-traded fund applications by the Securities and Exchange Commission, although analysts remain optimistic about future ETF approvals.
Warren Buffett's Berkshire Hathaway has outperformed the S&P 500 even if its stock price crashed by 99%, with a gain of nearly 3,800,000% between 1965 and 2022 and stock currently at record highs.
Large-blend stock funds, particularly S&P 500 exchange-traded funds (ETFs), have performed well in the last five years, with gains of 15.1% as of August 30, 2023, and low fees associated with iShares and Vanguard funds have contributed to their success. Among the top-performing large-blend ETFs are the Invesco S&P 500 Quality ETF, iShares Core S&P 500 ETF, SPDR Portfolio S&P 500 ETF, and Vanguard S&P 500 ETF.
The stock market is still in an uptrend despite a recent pullback, and there is a likelihood of higher stock prices in the near term as long as the market continues to advance within its uptrending channel. Additionally, the recent breakout in the S&P 500 is a bullish sign for the market, and commodity-related stocks have begun to outperform, making them attractive investments.
Investing in the S&P 500 ETF, such as the Vanguard S&P 500 ETF, can be a low-effort way to build wealth over time, with the potential to turn $100 per week into $790,000 in approximately 30 years.
The article mentions the Invesco S&P 500 GARP ETF (SPGP). The author's recommendation is to buy the SPGP ETF.
The author's core argument is that the SPGP ETF is an exceptional fund that combines growth and value investing strategies and has delivered exceptional returns in both bull and bear markets. The key information and data provided include the fund's investment strategy, sector allocation, historical returns, distribution and yield, comparison with other funds (OMFL and MOAT), and the author's rating of the SPGP ETF as a buy.
John Hussman warns that stocks are overvalued and investors buying into the S&P 500 now are likely to experience abysmal returns for the next decade. He cites high valuations and poor investor sentiment as indications of a forthcoming steep sell-off, and predicts an annualized return of -4% over the next 12 years.
The S&P 500 has had a strong performance this year, but reaching a new record high seems unlikely at this point.
Investors would have been better off buying the S&P 500 instead of adjusting their portfolios in response to Michael Burry's stock-market warning tweets, as the index had an average 6-month annualized gain of 34% following a selection of Burry's tweets from 2019 to 2023, according to Charlie Bilello, chief market strategist at Creative Planning.
Despite its high valuation, a strategist predicts that the S&P 500 can still continue to rise.
The S&P 500 index has seen impressive gains this year, but one expert believes the rally is coming to an end, citing rising bond yields as the main threat to stock prices.
Bank of America predicts that the S&P 500 could surge over 25% within the next year based on a bullish indicator, with low long-term profit growth expectations among analysts signaling potential gains.
The S&P 500 is expected to rise 13% by June 2024, according to a historical correlation between first-half returns and subsequent 12-month gains, indicating a potentially bullish outlook for the stock market.
The Invesco S&P 500 Momentum ETF (SPMO) invests in momentum stocks across various sectors, with a high turnover ratio and relatively low price multiples, generating strong total returns but exhibiting higher volatility and bias towards specific industries. Despite its low yield and recent underperformance, the fund has potential for long-term growth.
Bitcoin and the S&P 500 are likely to end the third quarter lower due to the strong case for owning bonds over stocks, with government bonds offering a higher return, making them more attractive than risk assets like cryptocurrencies.
The recent market pullback continues as the S&P 500 is down 2.9% for the week and 5.9% below its high-water mark, but the broadening of market participation is a positive indicator for the sustainability of the bull market.
The S&P 500 is up 12.5% in 2023, driven by megacaps including Nvidia, Meta Platforms, and Tesla, while several other top performers such as Royal Caribbean, Carnival Corp., and General Electric have recently sold off during the market correction and need some repair time.
The S&P 500's top seven stocks have surged more than 50% this year, while the rest of the index has only risen about 5%, highlighting a growing performance gap.
Concordium CEO Lars Seyer Christensen and other experts caution crypto investors to have realistic expectations for the next bull market, stating that it will be different from previous cycles, and not all digital assets will increase in value. Some investors, however, believe that the market is already turning bullish and recommend investing in Bitcoin, Ethereum, and tokens with practical use cases. The approval of a spot Bitcoin exchange-traded fund (ETF) in the US and an improvement in the macroeconomic situation are seen as potential catalysts for the next bull market.
The S&P 500's potential for a long-term bull market relies on it surpassing a key level.
Bitcoin and Ethereum saw gains in the crypto market driven by factors such as the announcement of an Ethereum futures ETF, a rise in the S&P 500 index, and short liquidations, with the rest of the market also experiencing bullish gains.
The author discusses the 2024 stock market outlook, including the bull vs. bear debate, the S&P 500's potential performance, and top stock picks for the year.
The S&P 500 has been hit hard by the September Effect, but investors should remain optimistic as history suggests the market will rebound, and there are compelling buying opportunities in certain growth stocks like Block and SolarEdge with upside potential of 93% and 127% respectively.
Heading into the final months of 2023, the bullish sentiment in the stock market has faded due to a fresh sell-off, while the bond market is struggling and growth stocks are losing momentum. The outlook for the stock and bond markets is uncertain, and there are opportunities in undervalued equities and certain sectors such as financial services, basic materials, communication services, and consumer cyclicals. Mutual funds experienced a shift in performance, with growth funds struggling and value funds gaining momentum, while bond funds had mixed results. Many of the largest active funds outperformed index funds in the third quarter.
The S&P 500's stability at the 4,200 level is crucial for determining the continuation of the bull market, with chartists and investors closely monitoring the 200-day moving average and potential implications for long-term trends and investor sentiment.
S&P 500 utility stocks are currently undervalued and offering attractive dividends, making them an appealing opportunity for value-focused investors, despite competing with Treasury yields.
