The stock market has always been a topic of great interest to investors, and recently, the S&P 500 has surpassed the February high, recovering from a severe sell-off in April. Positive information about corporate earnings and developments in the economic situation are providing momentum for many investors. However, there are still many uncertainties they need to consider. This article will analyze the current situation of the S&P 500, evaluate the influencing factors, and predict trends in the near future.
S&P 500 Surpasses February High
The S&P 500 closed above the February peak on Friday, showing a strong response after the drop in April reduced its value by nearly 20%. This recovery occurred within four months, much faster than experts predicted. However, market sentiment remains cautious. Currently, the S&P 500 is only 0.5% higher than the February high, but the strength of this rally is not as strong as previous ones.
According to data from CNBC, corporate earnings in the previous quarter surpassed expectations, and future estimates have also been revised upward, leading to a slight decrease in market valuations, from 22.5 times the projected earnings in February to 22 times currently. Although the market is still considered expensive by historical standards, investors often do not care when earnings increase and the Federal Reserve does not reduce liquidity.
Market Sentiment and Strategic Assessment
Although the S&P 500 has reached a new high, investor confidence has not fully recovered. A CNBC strategist survey at the beginning of the year showed the median target for the S&P 500 was 6,600 points, equivalent to a 12% increase in 2025. However, this optimism has diminished after the shock in April; the target has now been lowered to 6,057 points, 2% lower than the current level of 6,173 points.
At the same time, investor sentiment has also changed. A survey from Investors Intelligence shows that the gap between the number of optimistic and pessimistic investors is very weak, even though the index has risen 27% from the low in April. Data from Deutsche Bank indicates that current stock investment levels are still at 30% compared to all times since 2010, indicating caution from automatic investment funds.
Current Economic Situation
The economic situation seems to have improved slightly compared to February. The US dollar index, crude oil prices, and the 10-year government bond yield are currently lower. Although the credit spread remains wider, it is still under control. The market is also getting closer to the possibility that the Federal Reserve may cut interest rates in September if conditions allow.
But it should also be noted that recent economic numbers such as personal income and spending have not met expectations, raising many questions for investors about the next trend. They are looking at the employment report this Thursday, as this could be a decisive factor in the Federal Reserve's interest rate adjustments in the near future.
Market Developments
Clearly, the growth of the stock market is supported by risky bets in the retail investment sector. One in seven stocks in the Russell 3000 list has increased by 50% or more since April 8. Retail investors are returning to invest in risky stocks, leading to a 50% increase for the VanEck Social Sentiment ETF over the past 11 weeks, breaking the previous record high of the meme stock era.
Circle Internet Group, a cryptocurrency company, was listed about three weeks ago at a price of $31. Some investors quickly withdrew, but the stock price soared to $263. It then turned back down to $180. In recent days, more than half of the available shares have been traded, indicating market manipulation.
Conclusion: Looking to the Future
The recent recovery of the S&P 500 has many similarities with previous recoveries, but it is not without warning signals. The number of stocks reaching new highs is very limited, while the S&P 500 index is still in an overbought state. It remains to be seen whether this journey will maintain stability or fall into instability in the near future.
With the stock market always experiencing significant volatility, investors need to be alert and patient to accurately assess trends. By closely monitoring economic indicators and market sentiment, you can find the best opportunities to optimize your investments in the coming time.
Source: https://tintucbitcoin.com/co-phieu-thang-2-vung-chac-hay-khong/
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