S&P 500 Set To Vault To New Bull Market High

The S&P 500 peaked this year on July 31 at 4588.96 (chart). It closed today at 4547.38, which just happens to be the resistance line connecting the July 31 high with the all-time high of 4796.56 on January 3, 2022. It could easily rise to this year's high, which is just shy of our 4600 year-end target by vaulting over the resistance line. With the benefit of hindsight, our year-end target might be too conservative. A move up to the match the record high is conceivable either by yearend or sometime early next year.

The stock market rose today on AI news out of Microsoft and despite the 0.8% m/m drop in the Index of Leading Economic Indicators (LEI) and the flat reading for the Index of Coincident Economic Indicators (CEI) (chart). We've previously observed that the LEI gives much more weight to the goods sector of our economy than the services one. The former has been stalled since early 2021, while the latter has flourished.