That could also create some competition for stocks, potentially sending equity prices lower. “There’s definitely some potential for either a pullback or a bit of a consolidation as we get closer to that 4,300 level,” he said.Īfter the potential debt ceiling catastrophe was averted this week, the Treasury Department will start selling bonds like crazy. That means that the tech stocks that have powered the stock market’s gains this year are overbought, and investors will likely take profits as they edge higher, according to Turnquist. An equal-weighted version of the S&P 500 is up only about 1.5% for the year. One concern is that a large portion of the index’s 11.5% advance this year has been driven by monster gains in mega-cap tech stocks, while small- and mid-cap stocks have lagged behind. There are several reasons to believe that stocks could fall back below 4,200 in the near-term, says Adam Turnquist, chief technical strategist for LPL Financial. Now that the index has managed to breach the top level of resistance, that raises the question: Does this rally have legs? Meanwhile, the bears are tired of taking on the relentless bulls and failing to gain ground,” José Torres, senior economist at Interactive Brokers, wrote Friday.įor months, investors have debated what will lead the S&P 500 to break through, either moving higher or lower, from the roughly 3,800 - 4,200 trading range that it’s been stuck in for the past six months. ![]() ![]() “It was much easier for the bulls to take the upper hand with recent tailwinds from artificial intelligence and the debt ceiling providing momentum. ![]() The May jobs report showed stronger-than-expected job gains, but the unemployment rate ticked up and wage growth slowed.Federal Reserve officials indicated that the central bank will likely take a breather on raising interest rates at its June meeting after ten consecutive hikes.Congress passed the debt ceiling deal, paving the bill’s way to President Joe Biden’s desk to be signed into law - and ending weeks of turmoil on Wall Street about the potential catastrophic consequences of a debt default.
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