We have enjoyed a text book 2 years to the new bull market leading to 2 years of tremendous gains. From that bear market low in October 2022 the S&P 500 (SPY) has rallied nearly +70% into Thursday’s close.
You can appreciate after such a long run why 6,000 is proving to be a spot of strong resistance. But really that is just a short term story.
The average bull market lasts 63 months...so there is a lot of time left on the clock and a lot more gains to be had. For now, our goal is to put the best stocks in our portfolio.
Market Outlook
The most timely topic on the market is what a second Trump administration means for the economy and stock prices. I covered the key points in my recent article: Does Trump Change Stock Market Outlook?
Beyond that topic it’s just the usual stuff of checking out the latest economic data...especially anything on inflation and what that means for the next move by the Fed.
As shared with you guys in many of my recent commentaries, the most recent inflation data has been a bit higher than expected. Thus, it was a bit of a surprise to me that the Fed actually lowered rates another 25 basis points at the November meeting.
Since then, Powell is on record of saying that the pace of cuts going forward may be slower than previously expected. This is a nod of the cap towards the most recent data not being favorable on the inflation front. And thus keeping rates at current levels for longer may be needed to stamp out the last flames of inflation.
This explains why the CME is measuring a near dead heat coming into the December 18th Fed meeting about whether another 25 point cut is on the way. Just a week the odds were at 72% probability of another cut. That is now down to 55%. And to be honest...it should be lower given recent comments by Powell.
Don’t get me wrong. One way or the other they will get inflation back to the 2% target. Just a matter of how long.
So directionally we are in an environment that we know lower rates will be in our future. That is ALWAYS a time to be bullish. Just a matter of what are the best stocks to be in.
With 2024 clearly being a year that growth was in fashion that has led us to a period of fully inflated stock prices for the name brand stocks. Meaning the Magnificent 7 have valuations that need Ozempic injections to get down to size.
Even just viewing the 23 forward PE for the S&P 500 is a bit too lofty.
I am not saying this is a bubble. Just saying that most of the larger stocks are pretty fully valued and those looking for more stock price upside need to look elsewhere.
In my book that is small and mid cap stocks with a PE closer to 16 on average. In particular those with attractive growth stories as proven by healthy beat and raise earnings reports.
That is where you want to be in 2025. And gladly the POWR Ratings helps point the way to the very best of those stocks.
What To Do Next?
Discover my current portfolio of 11 stocks packed to the brim with the outperforming benefits found in our exclusive POWR Ratings model. (Nearly 4X better than the S&P 500 going back to 1999).
All of these hand selected picks are all based on my 44 years of investing experience seeing bull markets...bear markets...and everything between.
And right now this portfolio is beating the stuffing out of the market.
If you are curious to learn more, and want to see my 11 timely stock recommendations, then please click the link below to get started now.
Steve Reitmeister’s Trading Plan & Top 11 Stocks >
Wishing you a world of investment success!
SPY shares were trading at $594.51 per share on Friday morning, up $0.84 (+0.14%). Year-to-date, SPY has gained 26.26%, versus a % rise in the benchmark S&P 500 index during the same period.
About the Author: Steve Reitmeister
Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks.
How Much Resistance @ 6,000 for Stocks? StockNews.com
