Good evening, this is CNN reporting. It’s a bullish time for Wall Street with the S&P 500 index climbing nearly 15% this year and securing 30 record-high closes. The surge in stocks was fueled by strong corporate earnings and artificial intelligence, despite concerns over higher-than-expected inflation reports potentially slowing the Federal Reserve’s interest rate cuts in 2024. However, recent data in May showed cooling inflation, bringing it closer to the Fed’s 2% target.
Now, traders are anticipating two to three rate cuts this year as a result of the new inflation outlook. Goldman Sachs has raised its year-end target for the benchmark index to 5,600 from 5,200, citing a positive outlook for corporate profits. Evercore ISI also increased its price target to 6,000 for the S&P 500, compared to its previous target of 4,750. These higher targets reflect a 9.6% and 2.3% jump from Monday’s close, respectively.
“The backdrop of slowing inflation, a Fed intent on cutting rates, and steady growth have supported Goldilocks,” said Julian Emanuel, a senior managing director at Evercore ISI. The market has also experienced a period of low volatility, with the S&P 500 seeing its longest stretch of trading days without a 2% or more decline since 2018. However, this calmness could indicate that investors are taking on more risk in their portfolios.
Looking ahead, risks remain as much of the S&P 500 index’s returns are tied to a few big tech stocks. Additionally, uncertainties leading up to the US presidential election in November and potential economic downturns in 2024 pose threats. Despite the optimism, there are warnings that a recession might still be looming.
In other news, bacon prices have been sizzling while ham prices have cooled down, sparking curiosity among consumers in the meat aisle. Econ buffs attribute this discrepancy to differences in demand outside the US, affecting supply chains and causing variations in prices.
Moreover, Chinese nationals in Florida are facing restrictions on purchasing property due to a state law that went into effect last year. Chinese citizens without green cards could now face felony charges and prison time for buying property in the state, leading to uneasiness and confusion among ethnic Chinese residents. This law highlights the tensions between the US and China, especially during a presidential election year.
That’s all for now, stay tuned for more updates.
