Quiver Quantitative - The S&P 500 index (SPY (NYSE:SPY)) pushed past the significant 4,400 threshold, riding on a wave of optimism in the stock market as concerns about Treasury volatility diminished. This surge, which took the S&P 500 to a potential seven-week high, was further bolstered by the tech-heavy Nasdaq 100's significant gains, fueled by advances in major players like Microsoft (NASDAQ:MSFT) and Nvidia (NVDA)The positive technical indicators, including the S&P 500's breach of the 100-day moving average, pointed to a bullish momentum in the market, suggesting that the lows experienced in the previous month might have been the trough of the recent correction.
While the equity markets basked in their newfound strength, they seemed to shrug off less-than-ideal consumer sentiment data. Fed officials, including the Atlanta Fed President Raphael Bostic, conveyed that there might be no pressing need for further rate hikes if inflationary pressures eased, providing a silver lining for the market's outlook. Despite this, long-term inflation expectations among consumers reached a 12-year peak, underscoring the lingering concerns about inflation's grip on the economy.
Investor sentiment appears to be shifting from a defensive stance to a more opportunistic approach, as evidenced by Bank of America's (NYSE:BAC) Michael Hartnett's observation of a transition to "year-end greed" in anticipation of a dip in U.S. bond yields. The substantial inflows into global stocks, coupled with the hefty investments in money market funds, demonstrate a tactical balancing act by investors navigating the uncertain financial terrain.
Amidst the shifts in market dynamics, UBS (UBS) Global Wealth Management's Chief Investment Officer for the Americas, Solita Marcelli, sees potential for gains across various asset classes. This optimistic outlook for 2024 envisages a balanced portfolio reaping positive returns, cementing the sentiment that the equity indexes are poised for upward movement, underpinned by robust earnings growth among quality companies.
This article was originally published on Quiver Quantitative