Wall Street Predicts "Epic" Bull Run, Analyzes Investment Opportunities in the S&P 500 Index
The Standard & Poor's 500 Index has been soaring this year, breaking through the 5,200-point milestone last week. The recent rebound has been propelled by signals of Fed rate cuts. This move signals the end of the Fed's most aggressive rate-hiking cycle and boosts corporate profit growth.
As a result, Wall Street analysts are even more bullish on the Standard & Poor's 500 Index. To seize this opportunity, investors should bet on ETFs tracking the S&P 500 Index. These include the SPDR S&P 500 ETF Trust (SPY), iShares Core S&P 500 ETF (IVV), Vanguard S&P 500 ETF (VOO), SPDR Portfolio S&P 500 ETF (SPLG), and Invesco S&P 500 Top 50 ETF (XLG).
In the recent meeting, the Fed maintained interest rates steady in the range of 5.25% to 5.50% and hinted at three rate cuts this year, citing expanded economic activity, alleviated inflation, but rising inflation. According to the FedWatch indicator by CME Group, futures markets priced in nearly a 75% likelihood of the first rate cut at the June 11-12 meeting.
Lower rates typically reduce borrowing costs, helping businesses expand operations more easily and enhance profitability. This, in turn, will stimulate economic growth and boost the stock market.
Bullish Outlook
The dovish stance of the Fed, coupled with the artificial intelligence frenzy, has prompted Wall Street analysts to raise their target prices for the S&P 500 Index. Societe Generale raised its target price from 4,750 points to 5,500 points, marking the new largest bull market on Wall Street. Societe Generale stated, "The American exceptionalism thesis is continuously strengthening." This exceptionalism thesis refers to the unique driver that has kept the US stock market ahead of its peers over the past forty years and is expected to continue driving profits for more and more large-cap stocks.
Wall Street's bullish research reports are becoming increasingly aggressive, with Bank of America recently releasing a report stating that this long-term bull market in the US stock market is entering its 11th year and, more importantly, the institution emphasizes that from a technical analysis perspective, the benchmark US stock index—the S&P 500 Index—is expected to continue its strong upward trend in the coming years, thus fully extending the trend of the "epic bull run".
As the S&P 500 Index continues to hit new all-time highs this year, strategists at Bank of America suggest that from a technical trend perspective of the stock market bull run, this current round of the US stock market could be considered an epic "bull run" that is expected to continue until around 2030, and they predict that the S&P 500 Index could rise to 7,000 points by the end of 2026 (as of Monday's close, the S&P 500 Index closed at 5,218.19 points).
SPDR S&P 500 ETF Trust (SPY)
The SPDR S&P 500 ETF Trust tracks the S&P 500 Index, holding 503 stocks in its basket, with no single stock accounting for more than 7.2% of assets. The SPDR S&P 500 ETF Trust focuses on the information technology sector, followed closely by double-digit allocations to the financial, healthcare, and non-essential consumer goods sectors.
The SPDR S&P 500 ETF Trust charges investors an annual fee of 9 basis points and has a daily average trading volume of 67 million shares. Its assets under management amount to $524.8 billion.
iShares Core S&P 500 ETF (IVV)
The iShares Core S&P 500 ETF has assets under management of $449.9 billion, much smaller than SPY, with poorer liquidity, with a daily average trading volume of 5 million shares. It charges only 3 basis points in annual fees, 6 basis points lower than the products of the $DWS(DWS.AU)$ Bank.
Vanguard S&P 500 ETF (VOO)
The Vanguard S&P 500 ETF also directly tracks the S&P 500 Index, holding 503 stocks in its basket. It has accumulated assets of $432 billion and charges investors 3 basis points in annual fees. The Vanguard S&P 500 ETF has a daily average trading volume of 5 million shares.
SPDR Portfolio S&P 500 ETF (SPLG)
The SPDR Portfolio S&P 500 ETF tracks the S&P 500 Index, holding 503 stocks in its basket, with an expense ratio of 0.02%. The company has accumulated assets of $33.1 billion, with an average daily trading volume of 8 million shares.
Invesco S&P 500 Top 50 ETF (XLG)
The Invesco S&P 500 Top 50 ETF follows the S&P 500 Top 50 ETF Index, which measures the market-weighted performance of the 50 largest companies in the S&P 500 Index, reflecting the performance of US mega-cap stocks. The Invesco S&P 500 Top 50 ETF has managed assets worth $4.1 billion but has an average daily trading volume of approximately 1.2 million shares. XLG charges an annual fee of 20 basis points.
Comments