Stocks Soar Thanks to Cooling Inflation—And a Dash of Hope
The S&P 500 has been on a happy hip‑step, jumping 9% since late October. That climb is largely fueled by the good news that inflation is giving us a break, making everyone wonder if the Federal Reserve will finally hit pause on those stubborn interest‑rate hikes.
Year‑to‑Date Success Story
By the end of the year, the index has almost painted a picture of 18% growth. It’s lounging just 2% shy of the July peak, and the cooling inflation trend feels like the secret sauce behind this solid rebound.
When High Yields and Elections Come Into Play
- Higher Yields: These can tighten the mood and might pocket the up‑trend.
- Presidential Election: A potential game‑changer—expect some market jitters.
Running forecasts for 2024 are looking a bit gloomy, so the current gains might be a little corrective rather than a long‑term rally.
Bottom Line
While the markets are feeling the lift thanks to easing inflation, keep an eye on yields and the election. Just because the bounce is there doesn’t mean the ride will stay smooth forever.
Will The Market Flex Into a Fresh Peak or Gently Fold?
Just a few weeks away, the pulse of investor confidence could decide whether our charts hit another annual high—a tiny 6 % lift above the S&P 500’s January 2022 finish.
What’s the Buzz About a “Soft Landing”?
- “Soft landing” means the Fed trims inflation without kicking the economy to a halt.
- Despite a tighter monetary mood, job numbers and consumer cravings have shown tentative hiccups.
- Fed’s pivot from Quantitative Easing to Quantitative Tightening slashes about $90 B each month.
- High Treasury yields and lofty valuations are still standing in the way.
- Seasonal cheers—university break, holiday sales—may give the market a friendly boost.
Tech Titans – Sporting a Few Adjustments
Apple, Microsoft, Alphabet, and Tesla are keeping their earnings sheet tight in May, but Meta and Nvidia have dipped to brighter forecasts for FY24 and FY25.
Facing 2023’s Close: High Interest & Energy Slide
As we swipe into the year’s black‑out, interest rates remain sky‑high, energy dynamics twist, and for the first time, AI is the new seasoning in the pot. Wizards suggest a bullish S&P return of +9 % (dividends included), matching historical norms.
2024 Presidential Election — A Volatility Parade
- Tax cuts likely won’t shoot up; the budget’s near the $2 T pin.
- Valuations: 2024 SPY dividend muscles at $7.15; a 4 % GDP growth puts the price at about $246 per the CAPE or Gordon Model.
- “Despite bullish vibes, AI and lower inflation are countered by tighter credit and geopolitical potholes,” says Saqib Iqbal, a trading analyst.
- Without a shake-up in the Middle East, Ukraine, and an AI surge, beating 2023’s sky isn’t likely.
What You’ll Need
Keep your scanlines on the horizon, dollop in a bit of humor, and your fortune won’t turn blue‑ish. Get real‑time updates on this post right on your device—subscribe now.
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