Focus Distribution’s Post

“Volatility is the toll we pay to invest”📉 📈 In the moment, a big intra-year selloff can be understandably unsettling. But they happen all the time. Check out the chart below from JPMorgan’s Guide To The Markets, which is my favourite visualisation of short-term stock market performance. Going back to 1980, the chart shows each year’s annual return for the S&P 500 in grey and its intra-year max drawdown (i.e., the biggest sell-off from its high of the year) in red. During this period, the S&P has seen an average annual max drawdown of 14% while ending positive in 33 of the 44 years measured. This means that in most years, the market has more than recovered the losses experienced in the max drawdown. What is your drawdown expectations when assessing an investment? Source: Tker by Sam Ro #finance #wealth #data #markets

Another Wall Street team has shared an optimistic outlook for stocks this year. Bank of America's US equity and quantitative strategy team, led by Savita Subramanian, increased its year-end target for the S&P 500 to 5,400 from 5,000 in a note to clients on Sunday. This adjustment, along with a recent call from UBS, represents the most bullish predictions for the benchmark average this year among strategists tracked by Yahoo Finance. Subramanian mentioned that while sentiment has improved, euphoria levels remain limited, citing areas such as AI and GLP-1. #WallStreet #Stocks #S&P500 #BankofAmerica #UBS #Optimism #Finance #Investing #Predictions #Euphoria

https://lnkd.in/efxeMSjj Wall Street strategists are increasingly bullish about where the S&P 500 can end the year as the benchmark index continues to hit all-time highs.

Another positive day for equity markets, with the S&P 500 ending the day slightly up and breaking all-time highs once again. In the meantime, most Wall Street strategists have been upgrading their price targets for the index for 2024 (see chart below from Bloomberg). On the optimistic side, Barclays and Wells Fargo stand out, while on the negative side, J.P. Morgan is clearly the most bearish. Timing the market is a very difficult game, and one must take any predictions with a large pinch of salt. That said, with the S&P 500 trading at 21x 12-month forward earnings, stocks are clearly expensive. Does that mean we will see a large drawdown in the short term? Not necessarily. Valuation levels are a poor predictor of short-term returns. As we have seen in the past, valuations can remain very high for extended periods, as was the case during the dot-com bubble. Nevertheless, valuations are a relatively good predictor of long-term returns, which means that from an asset allocation perspective, the risk/reward profile for stocks currently is relatively poor.

S&P 500 share buybacks are about to cross $1 trillion in 2025, according to Goldman Sachs. This would be the first time in history with $1 trillion+ in annual buybacks. Goldman Sachs expects buybacks to reach $925 billion in 2024 and $1.1 trillion in 2025, for a combined 2 TRILLION in 2 years. Even as the Fed has kept rates higher for longer, financial conditions have eased. Risk on appetite is back and cost of capital is beginning to decrease. Are buybacks set to fuel stocks' next move higher? https://lnkd.in/dmT7QveJ

The stock market is in its longest stretch without a 2% sell-off since the financial crisis: (CNBC) Wall Street’s climb to record highs has come with conspicuously little volatility. The S&P 500 has gone 377 days without a 2.05% sell-off. That’s the longest stretch for the benchmark since the great financial crisis, according to FactSet data compiled by […] #hedgefund #portfoliomanagement #capital