The stock market continued its remarkable streak of gains, as the S&P 500 index closed the week with a modest increase of 0.4%. This marks the 18th consecutive week that the benchmark index has ended in positive territory, a feat that has not been seen since the late 1990s. The S&P 500 has now risen more than 25% since the start of the year, outperforming most other major markets around the world.
What is behind this impressive performance? There are several factors that have contributed to the bullish sentiment, such as:
The strong recovery of the US economy from the pandemic-induced recession, supported by fiscal stimulus, monetary easing, and widespread vaccination. The robust earnings growth of corporate America, especially in sectors such as technology, health care, and consumer discretionary.
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The relative calmness of the geopolitical and trade landscape, as tensions between the US and China have eased under the Biden administration. The low interest rate environment, which has made stocks more attractive compared to bonds and other fixed-income assets.
Of course, there are also some risks and challenges that could derail the rally, such as:
The emergence of new variants of the coronavirus that could pose a threat to public health and economic activity.
The inflationary pressures that could force the Federal Reserve to tighten its monetary policy sooner than expected.
The potential for regulatory crackdowns on big tech companies that could hurt their profitability and valuation. The possibility of political gridlock and social unrest in the US ahead of the midterm elections in 2022.
However, for now, investors seem to be shrugging off these concerns and focusing on the positive aspects of the market. The S&P 500 has shown remarkable resilience and stability, with minimal volatility and few corrections. It seems that nothing can stop this bull market from reaching new heights, at least for the time being.
The possibility of a rate hike by the Federal Reserve in the near future is not ruled out by some analysts. In fact, former Treasury Secretary Larry Summers suggested that the Fed may have to tighten its monetary policy sooner rather than later, given the inflationary pressures and the robust recovery of the US economy.
The US stock market continues to soar, reaching new heights in 2024. The S&P 500 index, which tracks the performance of 500 large companies listed on US exchanges, has gained more than a quarter of its value since January, beating most of its global peers.
This remarkable rally reflects the strength and resilience of the US economy, which has recovered from the pandemic faster than expected. The S&P 500 is also supported by strong earnings growth, low interest rates, fiscal stimulus and investor optimism. Here are some of the key factors behind the S&P 500’s impressive run this year.
The top-performing sectors in the S&P 500 are technology, health care and consumer discretionary. These sectors have benefited from the digital transformation, the vaccine rollout and the pent-up demand for goods and services.
Technology companies such as Apple, Microsoft and Amazon have led the market with their innovative products and services, while health care companies such as Pfizer, Johnson & Johnson and Moderna have delivered breakthroughs in fighting the coronavirus. Consumer discretionary companies such as Tesla, Starbucks and Nike have seen strong sales growth as consumers spend more on leisure and entertainment.