On Thursday, it’s Intel’s “AI Everywhere” launch, where the company will launch its fifth-generation Xeon processors for data centers and Core Ultra processors for laptops. The event comes after Advanced Micro Devices (AMD) held a similar launch event last week, helping move its share price up by more than 7%. Additionally, Wallerstein said the stock market’s rally should expand to companies other than the mega-cap tech stocks as AI benefits begin to trickle down to other companies outside of the technology sector. Evercore ISI strategist Julian Emanuel went from bearish to the biggest bull on Wall Street when he raised his year-end S&P 500 price target last month to 6,000 from 4,750. With the second half of 2024 underway, Wall Street strategists are updating their year-end price targets for the S&P 500, and nearly all of them are leaning bullish as they increase their forecasts. “Markets are convinced that U.S. large cap companies will see many years (not just one) of improving earnings.
How do major glitches and cyberattacks affect cybersecurity stocks?
The research firm said as long as earnings growth continues to accelerate, even if just slightly, it should fuel a continued rally in stock prices. Strategist Eric Wallerstein said the combination of $6 trillion in sidelined cash and imminent interest rate cuts from the Federal Reserve should drive stock prices higher. The S&P 500 has resumed its march higher as strong first quarter earnings numbers have helped ease investor fears about inflation and a potentially delayed Federal Reserve pivot to interest rate cuts. For any investors that were looking the 2024 gift horse in the mouth, last week showed some teeth. The week started with a quadruple-point drop in the Dow on Monday, which sparked the typical parade of red chyrons and “market sell-off” headlines. The days that followed saw additional sizable swings, though they included several sharp daily gains.
- It’s worth going over some terminology before we discuss how falling prices might affect markets.
- The research firm said it expects an explosive rally in the S&P 500 to materialize in the five days following the Federal Reserve’s FOMC meeting on Wednesday.
- The bond market is currently pricing in a 98.7% chance the Fed will maintain its current fed funds target rate range of between 5.25% and 5.5% at its June meeting, according to CME Group.
- Wallerstein added that, unlike the dot-com bubble in 2000, company profits are booming right now, which should lead to sustainable stock price gains.
Ned Davis Research: S&P 500 price target of 5,725
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What are cybersecurity stocks?
Intel will be the latest chipmaker to host a launch event that points toward its AI offerings. A strong rally in the stock market this year led to Ned Davis Research increasing its year-end S&P 500 price target to 5,725 from 4,900 last month. Leveraged trading in foreign currency or off-exchange products on margin carries significant risk and may not be suitable for all investors. We advise you to carefully consider whether trading is appropriate for you based on your personal circumstances. We recommend that you seek independent advice and ensure you fully understand the risks involved before trading.Information presented by DailyFX Limited should be construed as market commentary, merely observing economical, political and market conditions. It is not a solicitation or a recommendation to trade derivatives contracts or securities and should not be construed or interpreted as financial advice.
What kinds of investments could benefit from falling prices?
There are four cybersecurity ETFs with at least $500 million in assets on the market today. Both of these forces can depress consumer spending, which can create recession-like conditions such as high unemployment and low corporate earnings. Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our website or click to take an action on their website. Investors will also get a look at some retail sectors, with an earnings report from Costco and an investor call with pet-products seller Chewy. Also, U.S. drugmaker Regeneron will update investors with results from the 2023 American Society of Hematology (ASH) conference.
S&P 500, Nasdaq 100, Dow Jones Forecast for the Week Ahead
The near certainty of a rate cut from the Fed in September should spark a risk-on rally for stocks, especially given that the Nasdaq 100 has already experienced a near-10% correction in recent weeks, according to the note. This chart shows how interest rates dropped, while bond prices rose during the stock market dip. This effect bodes well for diversified portfolios as it provides a cushion to downside returns. The CrowdStrike outage happened to come just before a big month for cybersecurity stock earnings.
According to data from Bloomberg, the average S&P 500 earnings per share target for 2024 is $242. “Since then, consensus 2024 GDP forecasts have increased from 1.6% to 2.4%,” analysts led by Jonathan Golub wrote. “At the same time, recession/tail risks have declined on a number of key metrics including economist surveys and the Chicago Fed’s Financial Conditions Index.” Wallerstein added that, unlike the dot-com bubble in 2000, company profits are booming right now, which should lead to sustainable stock price gains.
Any examples given are provided for illustrative purposes only and no representation is being made that any person will, or is likely to, achieve profits or losses similar to those examples. DailyFX Limited is not responsible for any trading decisions taken by persons not intended to view this material. We’ve filtered the list for companies with a market capitalization of at least $250 billion. These are high-volume stocks whose earnings reports are often major trading events for options traders and day traders. Value stocks have historically outperformed growth stocks when interest rates are high, but that trend reversed in 2024 as investors anticipate a Fed pivot to rate cuts in the second half of the year. The Vanguard Value ETF (VTV) has generated a total return of just 6.3% year-to-date, while the Vanguard Growth ETF (VUG) has generated a total return of 14.7%.
“The downward revision to economic growth as well as smaller downward revisions to inflation make the Fed a little more likely to start reducing interest rates by September,” Adams says. Investors are hoping the market can continue its bullish momentum in June as the S&P 500 enters a three-month stretch that has historically been one of the best periods of the year for stocks. In the past two years, when stocks were down heading into a Fed FOMC meeting, stocks saw a five-day gain of as much as 5.5% and a median gain of 3.4%.
Investors should understand the risks involved in owning investments, including interest rate risk, credit risk and market risk. The value of investments fluctuates and investors can lose some or all of their principal. This chart shows initial dips in the S&P 500 and performance of the stock market over the proceeding 6-months. This chart highlights the last few months in the stock market and although the pullback was abrupt, it started with the market at all time highs. Bowman says that his firm is “following” cybersecurity stocks, in light of the rising volume of consumer data that needs to be protected from threats. He notes that the shift from in-person shopping to online shopping over the last decade has created “opportunity” for the industry.
Cybersecurity stocks are shares of publicly-traded companies that protect computer systems from digital threats. However, he says that there’s some value to paying attention to news about inflation and interest rates, for the sake of staying informed and knowing what to expect. A decrease in prices throughout the economy might sound appealing — especially after the rapid increases we’ve been through recently. On July 11, the Bureau of Labor Statistics (BLS) reported that the consumer price index (CPI) dropped 0.1% between May and June. And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free.
On Wednesday, the Producer Price Index (PPI) will show wholesale prices for business, another inflation indicator. “Our 2024 and 2025 earnings estimates remain unchanged but stellar earnings growth by five mega-cap tech stocks have offset the typical pattern of negative revisions to consensus EPS estimates,” Kostin said. These are the updated stock market predictions of some of the most bullish strategists on Wall Street. Lee’s confidence in a strong rally post-Fed meeting is based on the fact that recent Fed meetings have sparked a big rally in stocks. On the upside, we could see the trend-line from the summer high tested, but will first need to break above 3712. It is unclear at this juncture how a rally could unfold, but generally speaking only looking to play lightly from the long side as it does appear we have more in store on the downside as the bear market looks to have much further to go.
Special risks are inherent in international investing, including those related to currency fluctuations and foreign political and economic events.Before investing in bonds, you should understand the risks involved, including credit risk and market risk. Bond investments are also subject to interest rate risk such that when interest rates rise, the prices of bonds can decrease, and the investor can lose principal value if the investment is sold prior to maturity. Fewer earnings reports are scheduled this week, as earnings season has largely concluded, but there are a few tech companies scheduled to report. Oracle’s earnings on Monday could indicate the strength of demand for cloud and tech products, while Adobe’s report on Wednesday will help show whether the software designer’s new artificial intelligence (AI) products are meeting consumer demand.
“A cooler economy is limiting businesses’ ability to raise prices, which will help slow inflation in the second half of the year,” Adams says. He says high interest rates are weighing on consumer durable goods spending and multifamily residential investment. In his speech, Powell said it is unlikely the Fed will need to raise interest rates further but the appropriate path forward will instead be to continue to hold interest rates at current levels for an extended period of time.
Bonds rallied and rates dropped, providing a cushion against the stock-market dip. “Because markets have already anticipated it, that actual cut doesn’t mean a whole lot. This bout of deflation is unusual, given that we’re not in a recession, but it doesn’t mean the sky is falling. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services.