Investors have been eagerly awaiting a resolution to the ongoing debate about whether the S&P 500 will push above 4600 before the end of 2020. As we come near mid-way through the year, the outlook is far from certain. Optimists are still holding on to the prospect of a strong fourth quarter recovery, while bears are predicting a deeper plunge in stock prices tied to the pending election and global health crisis.
What’s clear is that the S&P 500 is currently trading close to all-time highs, sitting just below 4000. Despite a brief correction in March, the index has remained strong amidst the uncertainty, as economic data signals that the U.S. economy is slowly recovering. This has provided a strong boost to investor sentiment, leading to an increased appetite for stocks.
Likewise, a continued wave of new stimulus packages and quantitative easing initiatives from the Federal Reserve is also providing further support for stock prices. The combination of these market drivers could certainly push the S&P 500 above 4600 before the year’s end.
At the same time, however, there are a number of potential roadblocks that could keep the S&P 500 from reaching that mark this year. These could include a weak earnings season, continued fears of an economic slowdown, a resurgence in pandemic cases, or a drawn-out electoral cycle in November. Moreover, recent tensions between the U.S. and China could also have an impact on the markets, as both countries navigate a number of sensitive trade and geopolitical issues.
Whether or not the S&P 500 will push above 4600 by year’s end remains uncertain. In the meantime, investors should continue to monitor the economic and market trends carefully in order to make informed decisions for their portfolios.