Can the S&P 500 hold 5,000 points? This is one of the hottest topics in the market this week

Wind ·  02/12 21:00

Source: Wind

Hong Kong's Wande News Agency reports that the S&P 500 index broke through 5,000 points for the first time last week, but as more inflation data and corporate earnings reports are released, investors will observe whether this week's gains can continue.

The 5,000 point milestone does not represent technical resistance for the S&P 500 index, but an integer has had significant psychological significance for investors in the past and may represent a level where the stock market can rise further or consolidate from there. The index surpassed 4,000 points for the first time in April 2021.

Whether the stock market continues to rise or fall at record levels is a focus of debate among investors. Some expect that despite the economic slowdown, the expanding economy will continue to drive earnings growth and push up stock prices.

Others, however, are concerned that this milestone is a reason to be more cautious and suggest traders use the opportunity to make a profit settlement, particularly for large tech stocks that seem highly valued. The worrying signs they mentioned included rising bond yields, which rose to 4.17% this week on 10-year US Treasury bonds.

Jeremy Siegel (Jeremy Siegel) of Wharton Business School (Wharton Business School) said on CNBC's “Closing Bell” program: “Remember, when we think about 5,000 points, we also heard some very famous people tell us not long ago that the S&P 500 index will drop to 3,600 points.”

“In the long run, the stock market will fluctuate. I don't recommend being a short-term trader; I know a lot of people do it. “But I don't think the current market valuation will be too high for long-term investors.”

But Schroders investment strategist Karim El Nokali (Karim El Nokali) said investors should be careful: “Normally, when the market sees these big integers — sometimes for the first time — you'll see some correction.”

On Friday, the three major US stock indexes all achieved their fifth consecutive week of gains, and the 14th week since 15 weeks. Recent market optimism can be traced back to better-than-expected earnings results, as well as signs of easing inflation, a stronger labor market, and a more resilient economy — all of which suggest that the outlook for 2024 is more optimistic than many expected.

Up to now, about two-thirds of the S&P 500 companies have announced fourth-quarter results. After a smooth start to the quarter, the results are showing strong signs. According to FactSet data, earnings of S&P 500 companies are expected to increase 2.8% in the fourth quarter. This will be the second consecutive quarter of earnings growth. Some expect the positive growth momentum to continue in the next few weeks.

“What we have seen is that the company is doing a great job of maintaining profit margins. SignatureFD Chief Investment Officer Tony Welch said, “We have actually seen a slight acceleration or even acceleration in some profit margins, which is encouraging what we are seeing in terms of profit.”


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