### Summary
The S&P 500 returns over the last one, five, and ten years are only slightly above their long-term averages, suggesting that the stock market is not unanchored from reality. However, the performance of long-term US Treasuries has been poor, with even 10-year Treasuries resulting in losses over the last five years. Slower economic growth may be on the horizon, but it remains uncertain whether it will be enough to bring down inflation rates.
### Facts
- The S&P 500 returns over the last one, five, and ten years are only slightly above their long-term averages.
- The performance of long-term US Treasuries has been weak, resulting in losses for investors even after accounting for coupon payments.
- Slower economic growth may be on the horizon, but it remains uncertain if it will bring down inflation rates.
- The nature of the stock market rally suggests that investors are still searching for buying opportunities rather than thinking about selling.
- Energy, industrials, and financials have become favored sectors, while technology stocks have started to decline.
- The Chinese economy is struggling, with retail sales and industrial production growth slowing down.
- The Federal Reserve has expressed concerns about inflation but also noted downside risks to the economy.
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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.
Former Goldman Sachs executive Raoul Pal predicts that the stock market will soon hit a bottom, with the S&P 500 entering oversold territory, and expects institutional buyers to step in and establish a market bottom; he also suggests that Bitcoin and Ethereum are showing bullish signs on certain indicators.
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 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.
Investors are turning to high-yield cash alternatives, such as savings accounts and bonds, which offer returns of over 5% and are outperforming the S&P 500, prompting some to reconsider their exposure to the stock market's volatility.
Stocks are overvalued and a recession is expected in the first half of next year, according to economist Steve Hanke. He predicts that inflation will cool, Treasury yields will fall, and house prices will remain stable.
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.
Wharton professor Jeremy Siegel predicts that the stock market will continue to rise into the end of the year, with the S&P 500 potentially surging 25% and gaining an additional 9% if the Federal Reserve acknowledges falling inflation and refrains from further interest rate hikes.
Investors are unsure if the correction in the US stock market is over, as the possibility of a head-and-shoulders top on the S&P 500 is being discussed, although it is still uncertain if the consolidation will continue higher or lead to a downward trend.
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.
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.
Stocks have historically performed poorly in September, with an average loss of 1.12%, but investors should not base their decisions solely on this statistical trend and should focus on buying fundamentally strong companies at reasonable prices.
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.
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.
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.
The S&P 500 had a good week, rising 2.5% and coming 1.6% below the 2023 high-water mark set in July; however, there is a possibility of a recession if the Fed keeps rates high for longer than necessary.
The S&P 500's ability to maintain support at the 4,450 level will be crucial for the stock market's near-term performance, according to a technical analyst.
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.
Asset-bubble expert John Hussman warns investors that they may want to "buckle up" as a potential US recession looms by the end of the year.
Economist Gary Shilling predicts that the S&P 500 will decline by around 40% during this market cycle, citing recession indicators such as the yield curve and The Conference Board's Leading Economic Index. He believes that a US recession may already be underway due to the Federal Reserve's focus on reducing inflation, and high valuations in the stock market increase the likelihood of a significant drop.
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.
Higher interest rates have historically correlated with lower market returns, but new research from BMO Capital Markets suggests that the impact of higher rates on the S&P 500 is overblown, as returns tend to be slightly below average but with lower volatility; BMO recommends buying 28 stocks with low leverage and high free cash flow to benefit from this strategy.
Despite a perceived undervaluation of the S&P 500, analysts warn of potential volatility in both the stock market and the Bitcoin market due to the upcoming Federal Open Market Committee (FOMC) meeting, which could shape narratives and challenge conventional wisdom. The S&P 500 appears oversold while Bitcoin consolidates with a potential target of $22,000.
Stocks are considered overvalued by Jeffrey Gundlach, who expects a recession to occur in the first half of 2024 due to government overspending potentially leading to an inflationary recession or "stagflation."
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 S&P 500 showed multiple warning signs of a coming selloff, with indicators suggesting a potential downtrend and volatility in the stock market, prompting caution for investors and the need to closely monitor next week's market action and earnings report season.
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.
The S&P 500's potential for a long-term bull market relies on it surpassing a key level.
Technical analyst John Salama predicts that the S&P 500 will regain positive momentum and has identified five stocks that he believes can rise up to 50% by the end of October, including SkyWest, Tesla, Carvana, DraftKings, and IonQ.
Investors are concerned about a potential showdown for the S&P 500 as stock market commentator, Heisenberg, shares a chart indicating bearish patterns and a major trend line off the October lows, suggesting a sharp drop in the index. Rising bond yields, climbing oil prices, and fears of slowing consumer spending are also factors contributing to investor unease.
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.
The recent losses in the S&P 500 could be beneficial for the overall index, as market breadth and gains across companies are considered signs of a healthy stock market, according to Wall Street strategists. The outperformance of a select group of large-cap stocks known as the 'Magnificent Seven' is expected to give way to a cyclical trade led by the other 493 companies in the index.
The S&P 500 closed out the quarter with a 3.6% loss, attributed to factors such as rising interest rates, a slowing housing market, and businesses preparing for tough times, resulting in a slow decline in stocks. Additionally, the resumption of student loan payments and expectations of more rate hikes from the Federal Reserve are expected to impact consumer spending power and business cutbacks. However, as the year comes to an end, traders and investors may look forward to 2024 for possible rate cuts and a return of strength in the market.
The Federal Reserve's aggressive interest rate hikes have resulted in a decline in the profitability of S&P 500 companies, with the return on equity ratio falling this year, and the trend could worsen if interest rates remain high.
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.
Manish Kabra, head US equity and multiasset strategist at Société Générale, predicts that the S&P 500 will continue to be a "buy the dip" for the next six months due to improving profit growth and cyclical data, with a target range of 4,050 to 4,750, before a mild recession in 2024 potentially leads to a selloff in US stocks.
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.
JPMorgan's Marko Kolanovic predicts a 20% sell-off in the S&P 500 due to high interest rates, highlighting cash as a protective strategy and warning that the "Magnificent Seven" stocks are vulnerable to steep losses.
The dominance of the seven largest stocks in the S&P 500, including Apple, Microsoft, and Amazon, may indicate a brittle bull run and weak market breadth, causing concerns among financial experts. However, there is no need for drastic actions, and investors should stick to a disciplined investment plan and ensure diversification.
Despite challenges such as surging Treasury yields and Federal Reserve hawkishness, the equity-investing landscape has shown resilience, with the S&P 500 posting modest gains and the Nasdaq 100 up for the week. Investors remain optimistic about the economy's ability to withstand higher borrowing costs and anticipate positive revenue and earnings growth. Credit markets have remained stable, while volatility has remained muted and profit strength in Corporate America is expected to drive stocks.