The recent strong run in stocks could be just the beginning, according to Canaccord Genuity. The S & P 500 rose 0.9% last week, capping a six-week advance. That also marks the benchmark’s longest weekly winning streak since late 2023. The recent rally comes as the current bull market turned two years old. Since a closing low reached Oct. 12, 2022, the broad market index has soared nearly 64%. Canaccord Genuity analyst Michael Welch thinks more gains could lie ahead. .SPX mountain 2022-10-12 SPX during bull market “The current two-year-old bull market remains below the median in both percent gain and duration, suggesting the upside has further room to run,” he wrote Monday. “We continue to believe that with a Fed rate cut cycle in place, a favorable seasonal period, and new highs in the broader indices, now is not the time to fight the Fed or the tape, but it is an opportunity to position for further upside, especially on any weakness.” Indeed, the Federal Reserve is expected to cut rates two more times before year-end, according to the CME Group’s FedWatch Tool. Those reductions are expected to be smaller than the jumbo-sized half-point rate reduction seen in September. The latest market run also comes as investors pore through third-quarter results. So far, about 70 S & P 500 companies have posted earnings, with 75% of those exceeding expectations, per FactSet. Welch said the reporting period could bring some volatility to the market, along with the U.S. presidential election in two weeks. Still, the long-term trend is to the upside, he noted. Elsewhere on Wall Street this morning, Goldman Sachs upgraded Warby Parker to buy from neutral. The bank noted that the eyeglass company’s strong fundamentals justify the stock’s high valuation. “This multiple represents a premium to our sector average multiple, which we believe is appropriate due to WRBY’s stronger top line growth outlook and margin expansion opportunity,” Goldman wrote.
The stock market is primed for more gains ahead, Canaccord says
Oct 21, 2024
