Por Lewis Krauskopf
NEW YORK, Apr 2 (Reuters) – US President Joe Biden’s multibillion-dollar infrastructure investment plan and the upcoming season of corporate results could offer investors new insights into the sustainability of a rally that has led to losses. stock market values at all-time highs.
The S&P 500 hit 4,000 points on Thursday for the first time, ending the session 1.18% higher to 4,019.87 points, expanding the benchmark’s gains to nearly 80% from March lows in March. 2020.
This increase has been driven by the unprecedented stimulus measures taken by the United States and by expectations that the spread of COVID-19 vaccines will help the economy to recover.
Signs of stronger business and economic growth could bolster investor sentiment after a quarter in which stocks rose sharply, but there was also a worrying rise in both bond yields and various pockets of investment. volatility in the markets, including the vertiginous rise in GameStop shares and the debacle of the Archegos Capital ‘family office’.
“We’ve seen a lot of volatility in the last few months,” said Matt Hanna, portfolio manager at Summit Global Investments. “There is always the doubt that maybe you could lose your footing, but now that we are reaching 4,000 I am sure that this renews the confidence in the minds of many traders that this bull cycle is not over.”
Recent history suggests stocks could continue to rise this month, with the S&P 500 posting its biggest average gain in April of any month in 20 years, according to Ryan Detrick, chief market strategist at LPL Financial.
One of the market’s near-term focuses will likely be whether the US Congress approves the infrastructure plan that Biden formally unveiled this week. It includes $ 2 trillion of spending, but also an increase in corporate taxes that investors fear could undermine profits.
Investors have taken the tax plan largely in stride, as it has been adjusted to expectations and may not go into effect until next year, but any new tax hikes accompanying Biden’s proposed next spending plan it could be risky, said Walter Todd, chief investment officer at Greenwood Capital.
“The market has digested the initial news very well,” Todd said. “My concern is that potentially the next round may be broader on the fiscal front than people expect.”
Company results will be released in mid-April and first quarter earnings for the S&P 500 are expected to increase 24.2% from a year ago, according to Refinitiv IBES.
However, rising earnings expectations could have a downside, according to Randy Frederick, vice president of trading and derivatives at Charles Schwab.
“When the bar on expectations has been raised as high as it has, I think some disappointments are brewing and that could cause the market to stagnate,” said Frederick.
(Information from Lewis Krauskopf; additional information from Devik Jain in Bengaluru; edited by David Gregorio; translated by Flora Gómez in the Gdansk newsroom)