S&P had a phenomenol run year to date. It has journeyed almost 1000 points from 4743 on 2nd January, 2024 to 5705 on 31st October, 2024. It made two valiant [but failed] lunges to 6000 on 14th October (5860) and then on 18th October (5865).
Now the question is whether S&P can make the last mile and reach the summit of 6000 by the end this year?
What will take for S&P to continue its ascent:
1) Election results: there is palpable excitement among investors on US election results in November. Punters are betting heavily on a Trump win while polls are showing very narrow lead for Harris. Once the dust of election result is settled then investors will have a better outlook of what to expect in 2025 and beyond. Election results may by itself be sufficient to cause of surge or a crash (buy the rumour & sell the news).
2) Another US Fed rate cut: PCE data on 31st October indicated that the menace of inflation has been tamed and leaves room for 1 or 2 rate cuts for 2024. 1 rate cut is almost certain and priced in, but the market may react if there a deviation from this widely held expecations.
3) Blockbuster earnings from Nvidia: S&P has often rode the coat tails of Nvidia in 2024 and the last earnings from the mega company may not be very different. While the sales revenue and EPS is certain to beat analysts expectations, it is the forward guidance that holds the key now.
[Disclaimer: I hold long Calls for S&P VOO ETF at strike of 545$ and Jan 17th expiry].
Happy Trading.