S&P 500 Index Could Go Higher – Stock Market Analysts

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Updated on Mar 11, 2020
Reading time 3 minutes
  • S&P 500 index has settled around a record high of 3,025 level.
  • Monetary policy leniency can advance the upward rally in the future.
  • Analysts don't see the S&P 500 index as overvalued.
  • Lower interest rates are enhancing stock market's appeal for the investors.

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The S&P 500 index has had a fabulous bull run in the past few weeks. After temporarily breaking the record high of 3,025 on Friday, it settled for the week around 3,022 level. Owing to the market currently challenging its record high and looking for a sustainable break above it, there has been a debate in the world of finance about the likelihood of the index to soon run out of steam and give “red” a chance. The general consensus among the stock market analysts, however, has highlighted that the S&P 500 index may have a few more tricks up its sleeve.

Leniency In Monetary Policy May Help The Stock Market In The Long Run

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The experts have argued that owing to the global economic slowdown that particularly keeps the major economies including the United States of America under pressure, is sufficient to stretch the leniency in the monetary policies. It is unlikely for the governments to take a rather strict stance in the near future as it risks stifling the growth prospects. Consequently, the stocks may be valued higher in the future due to such favorable operating conditions. The process can be expected to manifest in terms of further advance in the S&P 500 index, as per the analysts.

The financial markets, especially the S&P 500 and FTSE 100 indices have been bullish for almost a decade. Experts of the financial markets, however, have brought attention to the largely downbeat pattern in the indices that preceded the bull run of the previous decade. This has an implication that despite the buyers being in charge for years, the financial markets still may not be construed as overvalued by the investors. This in turn also hints at the possibility that the indices may print further upward rallies in the time to come that could offer massive profits to today’s buyers in the long run.

Lower Interest Rates Have Made The Stock Market More Appealing For Investors

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The analysts have further added that due to the reduced interest rates, investors are going to have a hard time finding a better alternative to put in their money. The return on cash, bonds, and related assets is currently significantly lower as compared to the stock market. Property yields, on the other hand, are also known to have disappointed a lot of times. The relatively appealing option for the investors, therefore, is to keep their money invested in the stock market. As a consequence, the buyers are likely to remain in charge and fuel a few additional bull runs in the future.

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