Relentless US stock rally driven by strong momentum, hitting record highs, historical data supports trend

From Investing.com: 2024-12-09 01:05:39

The relentless rally in U.S. stocks continues, with the S&P 500 hitting a record close 57 times this year, up nearly 28% in 2024. Momentum is driving the market, with the index not straying 10% from its high in over a year. Betting against the trend has historically been risky.

Bank of America warns of froth in the market, with the S&P 500 trading at 5.3 times price to book value, surpassing its 2000 peak. Sentiment is bullish, with record consumer confidence and crowded investor positioning. A near-term pullback could present a buying opportunity, according to experts.

Despite concerns of overvaluation and crowded positioning, broader markets remain calm. The Cboe Volatility Index hit a near five-month low. Historical data suggests market calm may persist for a while, with a strong December performance boosting investor confidence. A market reversal could be triggered by trade tensions.

Fundstrat Global Advisors’ technical strategist sees short-term ‘overbought conditions’ but is hesitant to exit stocks. Many investors are content to stay put for now, with strong momentum and historical data supporting their bullish stance.



Read more at Investing.com: Analysis-Strong momentum makes it hard to bet against ‘freight train’ US stock rally By Reuters