S&P 500 Record Close

The S&P 500 soared to a new high on Friday, marking its 15th record close of 2024 at 5137.08, with a nearly 1% gain for the week.

Steady Momentum

With a remarkable 16 out of the last 18 weeks showing gains, this streak has not been seen since 1971. Each of these 16 weekly increases has been at least 0.2% or more, setting a historic milestone for the index.

Solid Foundation

The ongoing rally is supported by stable economic data and outstanding earnings from Nvidia, highlighting the significant impact of artificial intelligence on market performance.

Analyst Predictions

Wall Street experts like Savita Subramanian from BofA Securities have raised their year-end target for the S&P 500 to 5400 from 5000. This suggests a potential 5% increase from the recent record close.

Mixed Sentiments

Despite positive outlooks, there are concerns regarding Wall Street sentiment indicated by the Sell Side Indicator. While it currently sits in neutral territory, escalating equity allocations could signal caution for investors.

Bright Spots

Encouragingly, fourth-quarter earnings for S&P 500 companies surpassed expectations by 4%, with resilient margins despite inflation pressures. As a result, full-year earnings per share estimates are holding steady, outperforming early-year projections.

Future Outlook

BofA's forecast positions earnings at $235 per share for the year, yet Subramanian remains optimistic that these figures could be surpassed. A revised 2025 outlook of $240 per share reflects confidence in continued growth.

Market Outlook and Investor Sentiment

As the market continues to navigate through the frenzies surrounding AI and weight-loss drugs, investor enthusiasm remains strong thanks to a robust economy. Despite big tech players like Apple and Google's parent company Alphabet being in the red for the year, the market index continues to surge upwards.

Broadening Rally and Market Dynamics

The Invesco S&P 500 Equal Weight ETF, designed to minimize big tech's disproportionate impact, has been hitting new all-time highs recently. This underscores a broader rally in the market landscape moving forward.

Long-term Perspective and Market Trends

Analysts like Subramanian highlight a significant mix shift in the S&P 500 since the 80s. With reduced debt, lower earnings per share volatility, and a transition from predominantly asset-intensive to asset-light companies, there are compelling reasons for bullishness in the market.

Potential Corrections and Year-End Projections

Despite the strong start to the year for the S&P 500, there could be a pause before its upward trajectory resumes. Historical data suggests periodic pullbacks and corrections, with technical indicators hinting at a possible downturn.

Looking ahead, a year-end rally seems probable, especially post-election results in November, which usually alleviate uncertainties. Various research firms, including Yardeni Research and UBS Group, have set year-end targets for the S&P 500, indicating positive gains.

Market Resilience and Future Prospects

Despite skepticism surrounding the ongoing bull market, industry experts like Ed Yardeni remain optimistic about its resilience. As high-profile firms adjust their outlooks and predictions for the market trend upwards, it's evident that the S&P 500's bull market might surprise many naysayers by the year's end.