Will The S&P 500 Hit New 2012 Mult-Year Highs?
The U.S. stock market jumped today after more news from the financial sector showed banks are much stronger than they have been for the last few years. Goldman Sachs reported strong earnings today which follow the earnings from JP Morgan, Citigroup and Well Fargo that all beat estimates.
The stock market was in correction mode for the last two weeks and could be going to new, higher levels if the short term downside risk is over. If the financials continue to lead the market, we expect participation from this sector to lift the general market. Apple has rebounded from its $60 billion market cap loss in the last five trading days and after hitting a new recent low of $571, the stock rose back comfortably above the $600 level.
The S&P could close at new highs in the short run that haven’t been seen in decades. The S&P 500 hit a four year high intraday recently but hasn’t closed above this level yet. We are looking closely at a comeback in small caps and tech to see if they will help financials lead the market higher. Economic data this week has trumped European concerns and volatility is down which could be indicative of investors and traders looking to get in on oversold equities.
This outlook could change daily based on volatility levels.