Yahoo Finance Zacks Investment Ideas feature highlights: QQQ, SPY, KRE, Coinbase and MicroStrategy
For Immediate Release
Chicago, IL – April 9, 2024 – Today, Zacks Investment Ideas feature highlights Nasdaq 100 ETF QQQ, S&P 500 Index ETF SPY, Regional Banking KRE, Coinbase COIN and MicroStrategy MSTR.
5 Reasons This Bull Market Is In Early Innings
The first quarter of 2024 has come to a close, and stocks picked up where they left off last year – with bulls in control. Two major U.S. equity markets, the Nasdaq 100 ETF and the S&P 500 Index ETF, have each enjoyed 10% gains year-to-date. Despite much higher interest rates, a Regional Banking scare, "stagflation" worries, and geopolitical escalations, the bull market is climbing the proverbial; "wall of worry," leaving many flat-footed investors in a state of disbelief. Nevertheless, five data points suggest that one year from today, stocks are likely to be higher, including:
Power & Distance are Correlated
The S&P 500 Index just posted back-to-back quarters for only the eighth time since 1950. To put the impressive gains into perspective, the S&P 500 Index has averaged 10% for the entire year for the past thirty years. More importantly, what does such strength mean for investors? Luckily for us, Ryan Detrick of Carson Research ran the numbers. Judging by the historical data, bulls should feel confident. A year later, the S&P 500 Index is up 12.3% on average and has only been lower once in seven times (it lost less than a percent the one time it was lower).
Investors Have One Foot Out the Door
The National Association of Active Investment Managers Survey (NAAIM) measures the average exposure investment managers have to the market. Before last week's pullback, exposure was over 100%. However, after a quick rug pull in the market, NAAIM plummeted to 84, a sign that investors have one foot out the door and sentiment is not overheated.
Seasonality
Election-year seasonality trends illustrate that presidential election years tend to be stronger than the average. Seasonality is worth emphasizing because it has been a surprisingly accurate indicator for investors for the past few years.
The Bull Market has a Fundamental Foundation
The S&P 500 is up 74% since January 2020. During this period, most of the gains are attributed to earnings and dividends, NOT multiple growth. The data acts as another argument against using P/E ratios in a vacuum – it's impossible to know the denominator in the P/E ratio ahead of time.
Risk on Assets are Breaking Out
Bitcoin and crypto-related stocks like Coinbase and MicroStrategy have acted as a phenomenal "leading indicator" recently.That's good news for bulls. The chart below shows that though Bitcoin is up quite a bit, the cycle is likely just starting, and a long runway awaits.
Bottom Line
Though the market has come a long way since the 2022 bear market, 5 data points suggest that the current bull market has a long way to run.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Invesco QQQ (QQQ): ETF Research Reports
SPDR S&P 500 ETF (SPY): ETF Research Reports
MicroStrategy Incorporated (MSTR) : Free Stock Analysis Report
SPDR S&P Regional Banking ETF (KRE): ETF Research Reports
Coinbase Global, Inc. (COIN) : Free Stock Analysis Report
