US Equities: Forecast 2024
The S&P 500 has been very strong in 2023, as it is flirting with the 4800 mark, which was the high point in January 2022. This meteoric rise was triggered by a dovish tilt in the thinking regarding rate cuts. The technical picture is not easy to interpret, as the immediate resistance level is at […]
The S&P 500 has been very strong in 2023, as it is flirting with the 4800 mark, which was the high point in January 2022. This meteoric rise was triggered by a dovish tilt in the thinking regarding rate cuts. The technical picture is not easy to interpret, as the immediate resistance level is at the previous high around 4817.
A break above this level would make it difficult to monitor the next major hurdle, which is the 5000 psychological mark. A retracement would also likely take place, and the support at 4639 would be followed by more support at the 4600 area.
S&P 500 Weekly Chart
Source: TradingView, Prepared by Zain Vawda
The S&P 500 fell 20% in 2022 after the Fed raised interest rates. In 2023, equity markets bounced back and were still positive. But, investors weren’t overly optimistic about corporate earnings growth.
The concentration of stocks in the S&P 500 has not been this high since the 1970s. This explains why the year-to-date gains in the index have been driven by a group of tech-heavy stocks. Corporate margins are expected to take a hit in 2024 due to the end of the 40-year era of record pricing power.
