“Can the S&P 500 Reach New Heights by Year-End?

The SP 500 is an index of 500 leading, large-cap companies traded in the US stock market, and is generally seen as a good stand-in for the broader market. As 2020 draws to a close, traders and investors are wondering if the SP 500 will reach or surpass the 4,600-level before the calendar turns over to 2021. So far in the fourth quarter, the SP 500 has been up, as investors put worries about the coronavirus pandemic and the upcoming US election behind them. After spiking to 3,901 in mid-March, the index has increased to 3,667 as of October 14th, a healthy move since then. Despite the overall positive trend in the SP 500, reaching 4,600 by year end could still be a tall order. In the past month, the SP 500 has remained relatively flat, bouncing between 3,600 and 3,700. And while the US economy has seen some notable progress post-COVID, there have also been further restrictions placed on various states in efforts to contain the virus – meaning the economic recovery could still be limited. Not only that, but on the political side, there remain multiple open questions over what a Joe Biden Administration would mean for the markets. As such, 4,600 may still be out of reach for the SP 500 before the end of the year. That said, the SP 500 could still have a good year depending on investor behavior. After all, economic indicators have been relatively strong with relation to consumer spending and unemployment, suggesting that the market’s move to 3,667 reflects a widening investor appetite for risk. At this point, any further gains of the index may come from investors taking incremental, yet controlled bets on various sectors. In the end, hitting 4,600 before year’s end may still be within reach, but it’s far from certain. For now, investors should remain cautious and wait for signs that trend will be sustainably bullish before making any large-scale investments. The SP 500 is an index of 500 leading, large-cap companies traded in the US stock market, and is generally seen as a good stand-in for the broader market. As 2020 draws to a close, traders and investors are wondering if the SP 500 will reach or surpass the 4,600-level before the calendar turns over to 2021. So far in the fourth quarter, the SP 500 has been up, as investors put worries about the coronavirus pandemic and the upcoming US election behind them. After spiking to 3,901 in mid-March, the index has increased to 3,667 as of October 14th, a healthy move since then. Despite the overall positive trend in the SP 500, reaching 4,600 by year end could still be a tall order. In the past month, the SP 500 has remained relatively flat, bouncing between 3,600 and 3,700. And while the US economy has seen some notable progress post-COVID, there have also been further restrictions placed on various states in efforts to contain the virus – meaning the economic recovery could still be limited. Not only that, but on the political side, there remain multiple open questions over what a Joe Biden Administration would mean for the markets. As such, 4,600 may still be out of reach for the SP 500 before the end of the year. That said, the SP 500 could still have a good year depending on investor behavior. After all, economic indicators have been relatively strong with relation to consumer spending and unemployment, suggesting that the market’s move to 3,667 reflects a widening investor appetite for risk. At this point, any further gains of the index may come from investors taking incremental, yet controlled bets on various sectors. In the end, hitting 4,600 before year’s end may still be within reach, but it’s far from certain. For now, investors should remain cautious and wait for signs that trend will be sustainably bullish before making any large-scale investments.