Shares of Analysts Say the S&P 500 Could Continue Its 24% Gain in 2023 Important Information to Support Further Growth in the Market
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Following a late summer drop, small-cap stocks made a robust comeback in November along with the overall market. The robust performances of small-cap companies are interpreted by analysts as a sign of favorable market conditions.
What happened was that the Russell 2000 Index, which measures small-cap companies, climbed 12.05% in December, bringing its annual gain to 15.1%. Ryan Detrick of Carson Group used historical data to argue that swings of more than 10% in the index are not typically negative.
According to Detrick, the index has gained more than 10% in December 19 other occasions. Following such success in December, the S&P 500 Index performed positively 90% of the time six months later, he noted.
Why Is It Important: The S&P 500, a measure of broader market outperformance, gained 24.23% in 2023. Analysts are concerned that high valuations may dampen market euphoria in the near future. Most believe that the mega-cap tech boom that propelled much of the market’s rise in 2023 will cool, putting the responsibility of market support on the smid-caps.
Deepwater Asset Management’s Gene Munster predicts that the iShares Russell 2000 Growth ETF IWO would surpass the SPDR S&P 500 ETF Trust SPY in 2024, with sub-$20 billion tech businesses likely outperforming large-cap corporations.
The market’s upward momentum is dependent on the Federal Reserve starting to reverse its rate rises and the economy avoiding a severe landing.
According to Benzinga Pro statistics, the SPDR S&P 500 ETF Trust SPY, an exchange-traded fund that tracks the S&P 500 Index, closed Friday’s session down 0.29% at $475.31.
