The Number of the Week Is 4,100
The S&P 500 has crammed in a year’s worth of expected gains in a little more than four months.
Stocks are at a crossroads.
Photographer: Angela Weiss/AFP/Getty Images
Something has to give. The S&P 500 Index blew past 4,100 on Friday for the first time, closing at 4,128.80 and bringing its year-to-date gain to almost 10%. How surprising is this? Consider that almost two dozen Wall Street strategists surveyed by Bloomberg News didn’t expect the benchmark to reach those heights until the end of this year. And therein lies a dilemma.
U.S. stocks have effectively crammed in a year’s worth of gains in a little more than four months. The reasons are not surprising. Trillions of dollars of fiscal stimulus combined with a Federal Reserve that has no intentions of lifting its benchmark interest rate from near zero until 2024 or cutting back on the $120 billion it’s pumping into the financial system every month through its bond purchases means the environment for risky assets remains attractive. And yet those whose job is to predict the future of stock prices don’t seem to have a lot of faith in the rally continuing. It’s not that they have been playing catch-up, raising their forecasts as equities rose. Rather, they came into 2021 predicting 4,100 would be reached and haven’t changed their collective mind.