With major stock indexes hovering around record highs, Piper Sandler analysts believe stocks have “more room to reach year-end.” They think this could boost the 2024 price target of 5,800.
The (DJIA) hit a new record high of 41,733 on Monday before closing slightly lower at 41,622. Last week, the index found support around 40,000 points and the 50-day moving average, recovering for four consecutive sessions.
The SMID cap indices also showed strength, bouncing back from their 200-day moving averages and recovering their 50-day levels.
The S&P 500 rose for a sixth straight session, nearing its all-time high at 5,670, while the Nasdaq lagged, falling 0.50% as technology stocks came under pressure. Apple (NASDAQ:) shares fell 2.8% to a multi-week low, and semiconductors fell 1.3% after last week’s gains.
Looking ahead to this week, investors are focusing on upcoming central bank interest rate decisions and sales data.
The Federal Reserve is expected to cut rates by at least 25 basis points on Wednesday, although there is still discussion about a possible 50 basis point cut. Piper Sandler expects volatility to rise in the coming week as investors react to the Fed’s rate cuts and assess whether the economy is on track for a soft landing.
Meanwhile, yields continued to fall, reaching a new 52-week low of 3.62%.
“We believe that 3.25%-3.00% is the key support area to watch for US 10-year yields in the coming months,” analysts said.
“A break below that level would increase fears of deflation and likely prompt the Fed to accelerate the pace of rate cuts, which would likely spook equity markets.”
