The stock market has been on a tear in the first three months of 2024, with the S&P 500 rising more than 10 percent and hitting 22 record highs. Investors have been pouring money into US stocks, driven by optimism that the Federal Reserve will be able to bring inflation down without harming the economy.
The surge in the stock market has also spread to riskier assets like Bitcoin, which has surpassed $70,000 for the first time. Mergers and takeovers are on the rise, and credit markets are seeing increased demand for borrowing and lending.
While the market is riding high on positive sentiment, there are signs of caution. Consumer finances are showing cracks, with rising credit card debt and delinquencies on car loans. Some companies are also struggling, with defaults on debts more than doubling last year.
The rally in the stock market has been led by a handful of tech giants, with companies like Nvidia, Meta, Amazon, and Microsoft driving half of the S&P 500’s gains on their own. Despite concerns about the economy, strong earnings, low interest rates, and high employment levels are keeping the market on an upward trajectory.
As Andrew Brenner, head of international fixed income at National Alliance Securities, puts it, “Stocks are working for people right now. I just wonder how long until we run into some trouble.” Investors will be keeping a close eye on the market as the year progresses to see if the bullish trend continues or if challenges lie ahead.
