Breaking News
Get 40% Off 0
Is NVDA a 🟢 buy or 🔴 sell? Unlock Now

S&P 500: All-Time Highs on the Horizon for 2024 Despite Heightened Macro Risks

By Investing.com (Damian Nowiszewski)Stock MarketsNov 28, 2023 05:57AM ET
www.investing.com/analysis/sp-500-alltime-highs-on-the-horizon-for-2024-despite-heightened-macro-risks-200643938
S&P 500: All-Time Highs on the Horizon for 2024 Despite Heightened Macro Risks
By Investing.com (Damian Nowiszewski)   |  Nov 28, 2023 05:57AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
 
US500
+0.03%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
IXIC
-0.28%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
  • The year 2023 so far can be considered a successful year for stock markets
  • And, forecasts for 2024 are moderately optimistic for risk assets
  • From a technical standpoint, the S&P 500 could be heading toward all-time highs
  • Missed out on Black Friday? Secure your up to 55% discount on InvestingPro subscriptions with our extended Cyber Monday sale

Despite the negative forecasts for equity markets at the beginning of 2023, the year has unfolded more favorably, defying the pessimistic scenario. Most indexes have demonstrated robust positive performance since January, with Nasdaq standing out with an impressive +36% gain so far.

Looking ahead to the next year, the forecasts indicate the bull market is likely to continue, potentially culminating in a rally toward all-time highs for stock indexes. But this scenario's probability hinges on avoiding a deep recession, a prospect that is not assured, especially in Europe, where the Eurozone is precariously poised on the brink of economic growth.

What Does the Macro Data Tell Us About Stock Market's Fate?

In the Eurozone, the data speak for themselves, clearly signaling an impending recession. Conversely, in the US, the latest GDP data showing a quarter-on-quarter growth of 4.9% significantly dismisses the recessionary scenario.

However, delving into other indicators related to economic growth paints a less optimistic picture. Notably, two indicators stand out: industrial production and manufacturing PMI, which have consistently lingered below the recession threshold for several months.

US Economic Data
US Economic Data

If we add to this the persistently inverted yield curve of US Treasury securities, the specter of recession in the United States still exists. Therefore, investors' attention should be focused this week on the next GDP and PMI readings, which will be published on Wednesday and Friday, respectively.

Economic Calendar
Economic Calendar

If GDP dynamics continue at relatively high levels along with continued disinflation, the stock market may not have an argument to make a deeper discount and continue to move northward.

A Fed Pivot Is Coming

Despite the conservative statements of Federal Reserve officials, who avoid clear statements as to the first interest rate cuts, the market is already anticipating it. According to the current probability distribution, we can expect 4 rate cuts next year starting in May.

Rate-Cut Expectations
Rate-Cut Expectations

How will the stock markets react?

The current economic situation in the world's largest economy will be key. The Fed may start the rate-cutting cycle for two reasons: progressive disinflation or a significant weakening of the economy. For stock markets, by far the most optimistic scenario will be the former, where we reach the inflation target while avoiding a major recession.

S&P 500: The Last Resistance Awaits Before Historic Highs

The S&P 500's bull market has continued so far, as reflected in the form of a dynamic northward impulse. Currently, buyers are approaching a key resistance level located in the price area of 4600 points, which is also this year's high.

S&P 500 Daily Chart
S&P 500 Daily Chart

The basic scenario assumes that the indicated area will be broken out and the growth will continue, with the next target in the vicinity of the historical maxima at 4800 points. Market bulls are favored by statistics, which show that December in the pre-election year counting from 1950 in 70% ends on a positive note with an average return of 2.9%.

***

You can easily determine whether a company is suitable for your risk profile by conducting a detailed fundamental analysis on InvestingPro according to your own criteria. This way, you will get highly professional help in shaping your portfolio.

In addition, you can sign up for InvestingPro, one of the most comprehensive platforms in the market for portfolio management and fundamental analysis, much cheaper with the biggest discount of the year (up to 55%), by taking advantage of our extended Cyber Monday deal.

Disclosure: The author does not own any of the securities mentioned in this report.

S&P 500: All-Time Highs on the Horizon for 2024 Despite Heightened Macro Risks
 

Related Articles

S&P 500: All-Time Highs on the Horizon for 2024 Despite Heightened Macro Risks

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (3)
Djamshid Bakiev
AMMM Nov 28, 2023 9:13AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
one'd better concentrate on short term predictions, as 2024 is a dark forest. 3 weeks before we were on the edge of breaking support and move much lower. now we talk about ath. Just a note about long term predictions..
Steve J
Steve J Nov 28, 2023 8:47AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
there will be no rate cuts next year, inflation is still way too high, prices are way too high
Mimi Alshmsi
Mimi Alshmsi Nov 28, 2023 8:33AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email