The SP 500 continues to set new highs and is setting the pace for other stock indices. In fact, it has closed at all-time highs for the last seven weeks.
So, will the rally continue to new all-time highs by the end of the year? While there is no certain answer, it is worth examining the factors driving the market to determine the likelihood of the rally continuing.
First, the Federal Reserve has been very supportive of the market in recent months, providing additional liquidity to the financial system and helping keep borrowing costs low. This has allowed investors to remain confident in the market, providing a tailwind to stock prices.
Second, the US economy is strong and the labor market continues to improve. The US unemployment rate has dropped to 6.7%, and job growth continues to be steady. The overall economic outlook continues to look positive, providing additional confidence to investors.
Also, corporate earnings for the third quarter of 2020 have been strong, with companies such as Apple, Microsoft, Alphabet, and Amazon reporting better-than-expected results. This has put additional upward pressure on the SP 500 in recent weeks.
Finally, the progress of several vaccines and treatments for Covid-19 has also been encouraging. Healthcare companies such as Moderna and Pfizer have reported encouraging results, and this has removed some of the uncertainty surrounding the global economic outlook.
Taking all of this together, it appears that the rally on the SP 500 has good potential to continue into the end of the year. While stock prices are always unpredictable, it looks like the positive backdrop could propel the index to new highs.
Thus, investors should keep a close eye on the SP 500 going forward to see if the rally can continue into 2021 and beyond.
The SP 500 continues to set new highs and is setting the pace for other stock indices. In fact, it has closed at all-time highs for the last seven weeks.
So, will the rally continue to new all-time highs by the end of the year? While there is no certain answer, it is worth examining the factors driving the market to determine the likelihood of the rally continuing.
First, the Federal Reserve has been very supportive of the market in recent months, providing additional liquidity to the financial system and helping keep borrowing costs low. This has allowed investors to remain confident in the market, providing a tailwind to stock prices.
Second, the US economy is strong and the labor market continues to improve. The US unemployment rate has dropped to 6.7%, and job growth continues to be steady. The overall economic outlook continues to look positive, providing additional confidence to investors.
Also, corporate earnings for the third quarter of 2020 have been strong, with companies such as Apple, Microsoft, Alphabet, and Amazon reporting better-than-expected results. This has put additional upward pressure on the SP 500 in recent weeks.
Finally, the progress of several vaccines and treatments for Covid-19 has also been encouraging. Healthcare companies such as Moderna and Pfizer have reported encouraging results, and this has removed some of the uncertainty surrounding the global economic outlook.
Taking all of this together, it appears that the rally on the SP 500 has good potential to continue into the end of the year. While stock prices are always unpredictable, it looks like the positive backdrop could propel the index to new highs.
Thus, investors should keep a close eye on the SP 500 going forward to see if the rally can continue into 2021 and beyond.
