S&P 500 hits all-time highs, small caps surge, mixed earnings results reported

From Yahoo: 2024-07-16 17:57:16

Stocks surged to all-time highs as investors bet on the Federal Reserve cutting rates soon. Small caps outperformed large tech companies, with the Russell 2000 gaining 3.5%. The broadening rally is seen positively, but the Russell 2000’s recent surge has sparked concerns of overheating. Analysts are divided on whether this rally is sustainable in the long term. Some see potential for further upside, while others warn of correction. Gold hit a record high amid market optimism.
Bank of America, Morgan Stanley, and Charles Schwab reported mixed earnings results. The surge in small caps is showing signs of overheating, with the Russell 2000 reaching an extreme overbought level. Some analysts warn of a potential short-term pullback, while others see the possibility of a mean reversion move. The S&P 500 and Russell 2000 are expected to perform equally well for the rest of the year, but not simultaneously due to their low correlation. The S&P 500 has gone 351 sessions without a 2% decline, signaling a prolonged period of market strength. The Federal Reserve cutting rates on falling inflation is seen as a healthier development than rushing to boost a weakened economy. Corporate highlights include Goldman Sachs tapping the investment-grade market, PNC Financial reporting NII growth, Microsoft facing an antitrust probe, Philip Morris expanding Zyn production, Starboard Value taking a stake in Match Group, and Adidas raising its profit target.



Read more at Yahoo: S&P 500’s $18 Trillion Rally Is ‘Broadening Out’: Markets Wrap