The S&P 500 is heading towards 5,000, according to UBS. Here’s when and how.


On the last trading day in August, we can reflect on a relentless rise in stocks that barely stopped this summer.

“The S&P 500 has posted at least 1 new closing high each week since the week of June 7, 2021, 13 consecutive weeks. August 2021 saw 12 new closing highs over the 21 trading days, with one day remaining, ”noted Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.

“Since the start of the year, the index has posted 53 new closing highs and is tied for 4e highest in index history (from 1926), ”added Silverblatt, who added that while the market seems wacky,“ if you’re not there you’re crazy and most likely without job (keep your finger on the button). “

Our call of the day UBS chief investment officer Mark Haefele sees the S&P 500 on track to another milestone – 5,000. That’s its target at the end of 2022, as the bank sees the index hit 4,600d ‘by the end of this year.

“The S&P 500 topped 4,500 for the first time, bringing gains for 2021 to over 20%. This may come as a surprise given the recent spate of negative news, including disappointing US consumer data and a continued rise in COVID-19 infections. But we believe the momentum towards the reopening and recovery is intact and that there is still an advantage for stocks, ”Haefele told clients in a note.

He lists favorable factors, including a fifth straight quarter of strong results with more than 85% of companies beating second quarter earnings and sales estimates; aggregate corporate profits increased by almost 90% from the levels of the previous year; income nearly 30% higher than pre-pandemic levels; and income growth is so robust that it is overwhelming by cost pressures.

“We believe cost pressures for businesses should ease as supply begins to catch up. In addition, consumer balance sheets are at their highest level in decades due to the large build-up in household savings over the past year, and retailers will continue to restock to meet demand ” , said Haefele.

Show us the stocks? “As the economic recovery widens, we expect cyclical sectors, especially energy and finance, to take the lead,” he added.

Read: The S&P 500 hasn’t seen such a strong rally since 1997. What’s next?


Thomas Lee, founder of Fundstrat Global Advisors, notes that the story points to a strong September as markets experience an equally optimistic first half.

This is even when investors worry about markets being “overbought” due to a pullback and statistics showing September yields since 1928 have fallen by about 0.1%. In a note to clients, Lee countered that seasonality factors change when a first half is strong – the first six months of 2021 saw a gain of over 13%, the 10th best since 1928.

This should mean a stronger than expected September and an intact “whole rally”. Here is his table:

Read: If you’ve got stock market jitters, here are 20 companies in two defensive sectors

China’s Delta Dredge and Moderna’s Vaccine Advantage

ZM video zoom,
Shares collapse after the video conferencing group announced its billion-dollar first quarter on Monday, but the outlook is somewhat disappointing.

Robinhood HOOD,
+ 2.83%
shares tumble after SEC Chairman Gary Gensler says Barron Monday that a controversial practice that brought in billions to brokers and high-frequency trading companies could be scrapped.

Lightning eMotors ZEV actions,
+ 16.47%
Stock skyrocketing after the all-electric powertrain and utility vehicle company announced a partnership with REV Group REVG,
the Collins Bus unit to manufacture fully electric school buses.

China’s official non-manufacturing purchasing managers index unexpectedly contracted in August, driven by the cooling of service activity due to the Delta variant outbreak. The official indicator of factory activity also fell more than expected due to weakening demand.

Moderna mRNA,
COVID-19 vaccine produced higher antibody levels than Pfizer PFE,
and BioNTech’s BNTX,
according to a study carried out among more than 2000 Belgian healthcare workers.

the Centers for Disaster Control and Prevention raised its COVID-19 travel advisory for Germany and propelled Switzerland, Guam, Saint Lucia, Porto Rica and Guam, among others, to the highest warning level 4. Monday’s decision came as the EU has removed the United States from its safe travel list.

More than a million people are without power in Louisiana and Mississippi in the wake of Hurricane Ida, with officials warning that it could be weeks before badly damaged power grids can be repaired.

Across the country, thousands fled the resort town of South Lake Tahoe in California on Monday in bumper-to-bumper traffic, sometimes as the Caldor fire blasted onto freeways.

Tuesday’s data includes the Chicago PMI, which fell in August, while June’s National Case-Shiller Home Price Index posted a third consecutive monthly increase in June. The consumer confidence index for August remains to come.

The steps

DJIA actions,
+ 0.55%

+ 0.62%

+ 0.85%
slipped south at the start of the action, while crude oil CL00,
is also on the decline, as refineries grapple with Hurricane Ida. Three-month aluminum price at the London Metal Exchange reached its highest level since May 2011, driven by production cuts in China. The dollar DXY,
is under pressure. Bitcoin BTCUSD,
traded lower.

Random readings

US Open champion Naomi Osaka has it eye on cryptos.

Kid gate-crass a TV interview with a mother politician in New Zealand, stirring a coarse carrot.

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