"S&P 500, Likely to Surpass 6600 Line"...Following Year-End 'Santa Rally', Unstoppable Next Year

The S&P 500 index of the New York Stock Exchange in the United States is expected to reach up to the 6600 line by the first quarter of next year, according to market experts. Following global investment banks, domestic securities companies have also joined the optimistic outlook.

Kim Sung-hwan, a researcher at Shinhan Investment Corp, stated, "The S&P 500 jumped to the 6000 line with the election of former President Donald Trump, and as the momentum of the Federal Reserve's monetary policy receives support, the price is being justified."

On December 2nd (local time), the S&P 500 index set a new record along with the Nasdaq index, which is centered on technology stocks. The S&P 500 index closed at 6,047.15, up 14.77 points (0.24%) from the previous trading day, marking the highest level in three weeks since the 11th of last month. The annual increase rate is 26.77% based on the closing price.

Kim, the researcher, mentioned, "In the shopping season, strong consumer spending is confirmed, and the psychological recovery of companies is beginning," adding, "Practical improvement companies are simultaneously emerging as 'battleground' forces."

He further explained, "The economic and stock price rebound requires a consistent communication strategy. Although the price burden is high, the strong fundamentals that have been lacking are now in place, and there is no room for hesitation."

He predicted that the S&P 500 could reach the 6600 line by the end of the first quarter of next year.

Kim, the researcher, emphasized, "The focus should be on the momentum of the Federal Reserve's monetary policy," adding, "Rather than rushing to conclude the year in December, it is necessary to prepare for the 'year-end and New Year' rally until the first quarter of next year."

He continued, "Although recent earnings improvements have been diluted, considering the delayed response of the market adjustment (consensus), the atmosphere of overshooting could persist until the fourth quarter."

He explained, "If the existing upward trend in stock prices is considered after the presidential election and the subsequent interest rate cut, the S&P 500 could surpass the maximum 6600 line by the end of the first quarter of next year."

In terms of style, small and medium-sized stocks are relatively strong, and in the sector, consumer goods and AI software, finance stocks are highlighted.

Kim, the researcher, stated, "The current momentum theme will be effective until the inauguration ceremony on January 20th," but also mentioned, "Considering past experiences, the market is likely to be reorganized into a practical growth phase."

For example, Kim, the researcher, suggested finance, including consumer experience software, cost-effectiveness (performance-to-price ratio) software, streaming, advertising, and B2B areas within AI software, as well as momentum and finance. In finance, he particularly recommended the capital market and fintech, where practicality is emphasized.

Shin Min-kyung, Hankyung.com journalist radio@hankyung.com