S&P 500: Improving Earnings, Strong Economy Make a Case for a Broader Rally

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S&P 500 News

US Small Cap 2000,The Utilities Select Sector SPDR® Fund,The Real Estate Select Sector SPDR® Fund

Stocks Analysis by Ed Yardeni covering: S&P 500, US Small Cap 2000, The Utilities Select Sector SPDR® Fund, The Real Estate Select Sector SPDR® Fund. Read Ed Yardeni's latest article on Investing.com

Remember the"higher for longer" mantra about the outlook for the federal funds rate during the spring? It turned into"lower and sooner" this summer in response to the economy's soft patch.report, the consensus might pivot to"no rush to ease further" during the fall. We can't rule out"higher for longer" making a comeback this winter. We are in the none-and-done camp for the rest of this year.

Instead, the economy continues to grow at a solid pace around 3.0% on a y/y basis. So there's no rush for the Fed to ease, especially if the economy continues performing well., S&P 400 MidCaps, and the S&P 600 SmallCaps have been rallying this year on expectations of Fed easing . So have the If so, that shift should favor the S&P 500 relative to the Midcaps because the former's forward earnings is benefiting more from a better economy than the latter for several reasons we have previously discussed .

As the economy continues to expand, more of the S&P 500 companies are showing positive y/y comps for forward earnings ."Insiders overall remain neutral as the market hits new highs. But there were targeted, large and actionable insider purchases last week in tech, biotech, the airline sector, fintech, and commercial real estate.

 

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