S&P 500 Starts Week with Bounce, Gets New Price Target
Coinspeaker
S&P 500 Starts Week with Bounce, Gets New Price Target
The S&P 500 Index (INDEXSP: INX) entered the week with a bounce and so much optimism with a short-lived boost driven by Goldman Sachs (NYSE: GS) raising their price target for the prestigious index.
The short-lived pump which was seen on Monday also comes as amid declining trading volumes and lingering concerns over a U.S. coronavirus stimulus bill
The S&P 500 complemented the growth of the Nasdaq Composite (INDEXNASDAQ: .IXIC) as the Dow Jones Industrial Average (INDEXDJX: .DJI) took a dive. While the S&P 500 index gained 0.3% to close at 3,381.99, the Nasdaq Composite hit an all-time high of 11,129.73 with a 1% boost. The Dow Jones Industrial Average shrunk by 85 points, or about 0.3%, to close at 27,844.91.
The S&P 500 index bounce is fueled by the individual stock performances of the companies it rates, an individual look at the performances of the stock at the turn of the week is crucial.
As reported by CNBC, the talks about plans by Amazon.com Inc (NASDAQ: AMZN) to own a minority stake in Cloud Company, Rackspace Technology has driven the e-commerce stocks up by 1.1%
Alphabet Inc (NASDAQ: GOOGL) and Microsoft Corporation (NASDAQ: MSFT) both rose by 0.7% contributed to the NasdaqComposite boost and indirectly, the S&P 500 index.
What Is Driving S&P 500 Index Bounce?
Goldman Sachs strategists led by David Kostin revising their price target for the S&P 500 index. They revised their earlier end of year target for the index from 3,000 to 3,600, representing a 20% boost. The new target draws from the past performances of the S&P 500 amid plans for further cash injections into the economy.
Additionally, the positive vibe around the early discovery of a COVID-19 vaccine has stirred an increased performance in some stocks the index is comprised of further justifying the new bullish call.
President Donald Trump also expressed his position on Friday.
I am ready to send more money to States and Local governments to save jobs for Police, Fire Fighters, First Responders, and Teachers. DEMOCRATS ARE HOLDING THIS UP!
— Donald J. Trump (@realDonaldTrump) August 14, 2020
With the Senate and the House in recess, talks of COVID-19 relief packages have been stalled and this has put more pressure on firms as the country looks toward recovery.
“The lack of a stimulus package is rightly causing some concern in the market”, said Liz Ann Sonders, chief investment strategist at Charles Schwab. “During the recovery phase, there was a greater boost to consumption from the unemployed cohort than there was from the employed cohort.”
While the stimulus checks were utilized by beneficiaries for consumer goods, firms like Amazon get more patronage driving the stocks higher.
As the lawmakers look to resume sessions to further advance talks on the coronavirus funds which is currently at a gridlock, the S&P 500 will get a serious bounce when the checks eventually get delivered to the eligible beneficiaries.