SPDR S&P 500 ETF Trust [SPY] Stock Forecast

The S&P 500 hit bull market territory this week from October lows, carried by a small number of mega-cap companies. Investors with an eye toward the concentration risk within broad equity exposure should consider managed futures for their low correlations to stocks and bonds.

While it has been months since the latest regional bank failure, many advisors remain concerned. They fear that the issues that caused runs on Signature Bank and Silicon Valley Bank have not receded.

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Anchored Volume Weighted Average Price (AVWAP) indicates that buyers may be regaining control of the S&P 500 trend. The Total World Stock chart also shows constructive AVWAP price characteristics, suggesting a possible trend shift from down to up.

The global economy is set to climb 2.1%, up from 1.7% projected in early January. The rise in projections came on the back of strength in the labor market, better-than-expected consumption in the United States and solid recovery in China following COVID-19 lockdowns.

Following the recent debt ceiling agreement, volatility is expected in the coming weeks/months as the US Treasury looks to replenish its cash reserves by issuing new debt. It is estimated that the TGA build-up could reduce the US money supply by approximately $1.1 trillion, potentially causing an approximate 5% drop in the S&P 500.

Amid a seemingly ceaseless cycle of rate hikes, analysts, even before the revelation of next week's Federal Reserve decision, are already setting their sights on July, anticipating another interest rate increase.

Here is a look at real (inflation-adjusted) charts of the S&P 500, Dow 30, and Nasdaq composite since their 2000 highs. We've updated this through the May 31, 2023 close.

Some market watchers may have come into 2023 expecting value to have its moment, but growth has excelled. According to YCharts, large growth ETFs have returned 16.6% YTD compared to -1.8% YTD for large value ETFs.

Though the latest Wall Street rally in narrow in nature, a run of strong economic data, such as an upbeat labor market, easing inflation, steady interest rates, and decent personal income, create a positive backdrop.