Stock market forecast for the next six months

what is the outlook for the stock market today?

Stock markets are volatile and can fluctuate significantly in response to company, industry, political, regulatory, market, or economic developments. As long as we continue to avoid a recession, the market could even reach new all-time highs. Elevated inflation remains a concern, and Federal Reserve officials have warned investors that interest rates may remain higher for longer until the central bank is convinced it has tightened monetary policy enough to keep inflation down. Analysts are also optimistic that the S&P 500 will continue to march higher next year. The average analyst price target for the S&P 500 is currently 5,038.15, suggesting additional upside in the next 12 months. Value investing, for instance, is about finding undervalued stocks and holding them until they’re not undervalued anymore, not buying call options ahead of a big earnings report.

what is the outlook for the stock market today?

The S&P 500 finished off 2023 with plenty of momentum after re-entering bull market territory in June. The index punctuated the start of the new year with a nine-week winning streak that put it within striking distance of its first new all-time high since December 2021. U.S. traded shares of ASML are up 20% in 2024 amid a 45.5% rally over the last 12 months. These investors are also more positive about the state of the broader economy.

The technology sector is up about 4% on Thursday, on pace to break a four-day losing streak with its best daily performance since May 25, 2023, when it jumped 4.45%. Traders are increasingly optimistic on the U.S. stock market and economy, according to new data from Charles Schwab. Other cryptocurrencies saw even bigger increases, helped by a boost in the stock market following Nvidia’s strong earnings, as well as an optimistic tone in the minutes of the Fed’s January meeting. Sunnova stock is down 25% as the company explores asset sales and implements cost-cutting measures after posting a deepening quarterly loss.

What are the risks?

The median sales price jumped to a fresh record $379,100, up 5.1% from a year ago. Sales totaled 4 million on the month, slightly ahead of the Dow Jones consensus outlook for 3.96 million. However, on a comparative velocity trade level the increase was just 3.1%, compared to the expectation for 4.8%. The news boosted other popular chip stocks and the broader market, with the VanEck Semiconductor ETF last up 6.5% to trade at a fresh high.

  1. Sales totaled 4 million on the month, slightly ahead of the Dow Jones consensus outlook for 3.96 million.
  2. Meanwhile, bearish sentiment fell by 0.6 percentage points to 26.2%, also below its historical average of 31.0% for the 16th straight week.
  3. Bullish sentiment rose to 44.3% for the week ending Feb. 21, more than the 42.2% in the previous reading, and above the historical average of 37.5% for the 16th straight week.

The New York Fed Recession indicator suggests there is a 62.9% probability of a recession sometime in the next 12 months. At the same time, the economy has remained so strong that some economists are concerned about the possibility it will grow too much in 2024 and inflation will rebound. Growth stocks and technology sector stocks performed extremely well in 2023 as anticipation for a Fed pivot grew. Since 1952, the S&P 500 has averaged only a 7% gain during presidential election years, below its roughly 10% average annual total return in a typical year. “But while uncertainties remain and there are compelling reasons to believe that these stocks may not surpass the highs of last year, we expect them to continue to perform well, captivating global investors’ attention in 2024,” Green says. But many investors remain optimistic that the FOMC will cut rates soon in 2024 and more aggressively than anticipated.

Market Sectors To Watch In 2024

The other risk is that most of the soft-landing narrative may already be priced into the market, leaving little room for significant further gains. The S&P’s forward P/E ratio (meaning price divided by consensus earnings expectations) has gained 5.5 points since its low of 15.3 in October 2022. It made those gains in anticipation of an earnings recovery, which is now happening. But if earnings do continue to grow from here, the impact on stock prices could be muted by falling P/E ratios. The chart below reminds us that P/E ratios are often zigging while earnings are zagging.

All eyes will be on the Personal Consumption Expenditures index on Thursday, which is the Federal Reserve’s preferred measure of inflation. Economists polled by Dow Jones are expecting consumer expenditure prices to rise 0.3% for the month of January, higher than the prior month’s cryptocurrency broker canada 0.2% increase. Wall Street traders bracing for key inflation data waded through mixed economic figures and remarks from Federal Reserve speakers for clues on the interest-rate outlook. Nvidia’s data center unit has blossomed, particularly over the past three quarters.

what is the outlook for the stock market today?

Technology and growth stocks have outperformed in 2023, and analysts expect S&P 500 earnings growth to rebound in 2024. That said, economists expect that lagging impacts of rising interest rates will weigh on U.S. economic growth in the coming quarters, and the economy is already showing signs of potential trouble ahead. From a valuation perspective, the S&P 500’s forward price-to-earnings ratio of 19.3 is currently above its 10-year average of 17.6. This premium valuation suggests S&P 500 companies would need to deliver some impressive earnings growth this year for the stock market to reach new all-time highs. Shares of Nvidia popped 16.4% to an all-time high after the chip company said total revenue rose a whopping 265% from a year ago — driven by its booming artificial intelligence business. Nvidia, which has become one of the largest U.S. companies by market capitalization, also forecast another stellar revenue gain for the current quarter, even against elevated expectations for massive growth.

News may get priced in to the stock market faster than you can trade, but that doesn’t mean that it always gets priced in correctly. And when the market is wrong, individual investors have an opportunity to beat it using other strategies. Researchers are much less enthusiastic about news-based trading among retail traders. A 2022 study by economists at Stanford University and the Massachusetts cmc markets broker review Institute of Technology examined the options trading behavior of retail investors over the course of more than 32,000 earnings announcements between 2010 and 2021. Studies suggest that news-based trading strategies can be a viable way to beat the market — as long as you have a supercomputer, a lightning-fast internet connection and a team of data scientists working for you.

More In Market Outlook

The information technology sector has the highest forward PE at 26.7, while the energy sector has the lowest at 10.8. Fortunately, the S&P 500 has delivered positive returns during each presidential re-election year in which an incumbent president is on the ballot since 1952. The energy sector has the highest percentage of analyst “buy” ratings heading into 2024 at 64% followed by communication services at 62% and healthcare 59%. The consumer staples sector has the lowest percentage of analyst “buy” ratings at just 47%. Core PCE, which excludes volatile food and energy prices and is the Fed’s preferred inflation measure, was up 3.2% in November, still well above the Fed’s long-term target of 2%. “The market’s recent strength is indicative of a new and very real AI-led bull market and business cycle that could last a decade thanks to the productivity growth and tailwinds from AI,” Denmert says.

Nvidia surged more than 14.5% to an all-time high on the back of another strong quarterly print and robust quarterly guidance as artificial intelligence demand shows no signs of easing. The sector is now up 1.95% so far this week, which puts it on track to notch its sixth positive week in seven weeks. Micron Technology, Nvidia, Synopsys and Cadence Design Systems are the sector’s biggest gainers week-to-date.

Stocks mixed after PCE inflation data match Wall Street expectations

The Commerce Department is expected to release its retail data for October on Wednesday. Transactions on Apple products came in at $1.4 billion dollars, similar to last year, according to JD. Xiaomi, a local competitor to Apple, reported a bump in purchases for its latest smartphone, which was a bestselling product on Alibaba. But third-party data providers believe that transactions across major sites reached $156 billion, or up by 2%, CNBC’s Eunice Yoon said on «Squawk on the Street» Monday morning.

Tech sector on pace to notch its best day since May

Our estimates are based on past market performance, and past performance is not a guarantee of future performance. The Zacks #1 Rank List is the best place to start your stock search each morning. Each weekday, you can quickly see the Zacks #1 Rank Top Movers from Value to Growth, Momentum and Income, even VGM Score. Zacks Portfolio Tracker on Zacks.com provides 24/7 monitoring of your stocks and will give you the information you need to help you determine when to buy, hold or sell your stocks.

This brings me back to my base case for 2024, which is a continuing bull market as the Fed pivots (at least initially), earnings advance, and the economy survives the great hiking cycle of 2022 to 2023. My strong hunch, based on market history, is that the bull market will broaden in 2024—with a wide range of types of stocks advancing—rather than the narrow leadership we saw for much of 2023. The Federal Open Market Committee has raised its fed fund target range between 5.25% and 5.50%, with a series of hikes since March 2022. Higher interest rates increase consumer and company borrowing costs, eating into profit margins and weighing on economic growth.

«WBD management teed up the company as a potential acquirer over the next months, which could help the company bolster its sports offering with the most highly demanded content,» he added. Utility stocks underperformed in the S&P 500 on Monday, reflecting the broader trend of 2023. Brent crude contracts for January rose $1.09, or 1.34%, to settle at $82.52 a barrel, while West Texas Intermediate contracts for December rose $1.09, or 1.41%, to settle at $78.26 a barrel. Veteran Wall Street strategist Ed Yardeni said in a note Monday that the S&P 500 is on track to reach 4,600 by the end of the year. Diversification and asset allocation do not ensure a profit or guarantee against loss. Past performance and dividend rates are historical and do not guarantee future results.

Utility stocks in the S&P 500 have also posted the worst returns this year, with the sector down more than 15% in 2023. The world is facing the highest level of geopolitical risk in five decades as the Israel-Hamas war threatens to spread and the war in Ukraine grinds on, the CEO of one of the top oilfield services companies said. Next year, the analyst expects prices to fall closer to the Fed’s target as consumers begin feeling the pressure of tighter financial and credit conditions. «There is less than a 10% chance of a rate hike at that meeting, so it is unlikely that we will get market-moving data to shift an unchanged decision,» said Jamie Dutta, market analyst at Vantage. As of last week, S&P 500® and the S&P’s price-earnings (P/E) ratio had reached a new recovery high, and were within striking distance of the all-time highs set in January 2022.

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