Even in Healthy Markets, Stocks Go Up and Down After more than a 30% total return on the S&P 500 over the last 12 calendar months, a five-month win streak, and a 27% rally in the first 100 trading days off the late-October lows, the market may finally be having a well-deserved break. We want to stress that this isn’t something to fear. It’s all part of the process, even in healthy bull markets. Stocks fell last week on inflation and Middle East worries. After the historic run, some type of consolidation is perfectly normal. CPI inflation came in hotter […]

Three Bullish Signals from the First Quarter “We may not know where we are going, but we better know where we stand.” — Howard Marks, Co-Founder of Oaktree Capital Management The S&P 500 was down 0.9% last week, getting the first quarter off to a slow start. A strong first quarter still suggests a positive outlook, but some bumps along the way are normal and even healthy. The U.S. economy continues to look solid, with markets rallying Friday after a stronger-than-expected jobs report. Market fundamentals show earnings growth has been the main driver of stock growth amid strong revenue growth […]

DON’T FEAR A STRONG START TO THE YEAR It’s April 1, and the first quarter of 2024 is in the books. On the heels of more than 25% in total return for 2023, the S&P 500 returned more than 10% in the first quarter. The logical question is: How much is too much? Looking at the numbers, more good news could be in store for the bulls. 2024 is off to a strong start. The first three months of the year have been positive, marking a five-month streak of stock market wins. Strong starts to the year typically lead to […]

The Case Against a Stock Market Bubble Despite losing ground on Friday, the S&P 500 climbed four out of five days last week to finish 2.3% higher. The index is now up 10.1% year-to-date. Last week’s gains were supported by the market’s interpretation of the most recent Federal Reserve meeting. Despite upgrading its view on the economy, the Fed continued to pencil in three rate cuts this year, which showed muted concern about inflation. Stocks have had strong gains so far this year, but there are no warning signs of a bubble. Stock gains since the start of 2020 have […]

Stocks Still in a Sweet Spot The S&P 500 was down for the second consecutive week last week, but even combined declines were modest at just -0.3%. A pause is normal and even healthy for a bull market. In addition, several signs continue to indicate an overall healthy market. Year-to-date gains are in the “Goldilocks” range — strong but not too strong — and the market is exhibiting solid participation across stocks, sectors, and regions. The S&P 500 saw modest declines for the second week in a row after a small inflation upside surprise. Nevertheless, solid year-to-date gains and broadening […]

The Bull Keeps Going We sound like a broken record, but that could be a good thing in a bull market, as stocks made more new highs last week. In the end, the S&P 500 closed marginally lower for the week after a late Friday afternoon sell-off. But stocks have been up 16 out of the last 19 weeks, rising more than 24% during that rally. In the history of the S&P 500, stocks have never risen that quickly with such consistent weekly gains. The bull run continued last week, with more new highs before a sell-off on Friday. Although […]

A Strong Start to the Year “Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.” — Winston Churchill The S&P 500 was up in both January and February for the first time since 2019. Historically, gains during the first two months of the year have suggested above-average strength for the rest of the year and over the next 12 months. The economy continues to appear in good shape. The numbers suggest the slight near-term lift in inflation is a bump, not a new surge higher. […]

In 2022, positive economic data typically led to a sell-off in the stock market, and weak data often led to a rally. This was due to the overriding worry that better data meant the Federal Reserve would hike rates and weak data meant it might cut. That wasn’t normal market behavior, and we are happy to report the market is reverting to more typical trends. Strong economic growth and better data should be viewed positively, as it shows the economy isn’t falling into a recession. And that is what is happening now. The bull market continued last week, setting new […]

New All-Time Highs at Last New highs! The S&P 500 Index set an all-time high for the first time in more than two years Friday. Setting all-time highs is generally supportive for markets, and they’re even better if it’s been a year or more since the last one. On the bond side, our base case is the Fed will cut rates 4-5 times this year with the first cut in May. As discussed in our 2024 Market Outlook, we believe the rate cuts would support a 4-6% total return for the Bloomberg U.S. Aggregate Index in 2024. For a broad […]

Carson Investment Research 2024 Market Outlook: Seeing Eye to Eye We are targeting a total return of 11-13% for the S&P 500 Index in 2024 and 4-6% for the Bloomberg U.S. Aggregate Bond Index. We believe the odds of a recession remain low, with continued income growth, a recovery in rate-sensitive cyclical areas of the economy, and untapped potential for productivity gains helping to support the expansion. We also share a long-term view of markets, highlighting the persistence of the equity risk premium and the value of diversification. What a strange year we had in 2023. Market participants, strategists, policymakers, […]