S&P 500 Could Build On 2023's 24% Gain: Analyst Shares Key Data Supporting Continued Broader Market Performance

Zinger Key Points
  • More than 10% move in Russell 2000 Index, an index of small-cap stocks, hasn't historically been bearish events, says Carson Group analyst.
  • He sees probability of 15%+ gains for the S&P 500 Index one year from now.

Small-cap stocks came back strongly as the broader market rebounded in November following a late summer slump. An analyst sees small-cap stocks’ strong performances as a harbinger of good times for the market.

What Happened: Tapping into history, Carson Group’s Ryan Detrick said that moves of more than 10% in the Russell 2000 Index, an index of small-cap stocks, are not historically bearish. The R2K Index added 12.05% during December, taking the gain for the year to 15.1%.

The index has made more than 10% gains in December 19 other times, Detrick said. Following such strength in December, the S&P 500 Index’s performance six months later was positive 90% of the time, he said.

A year later, the index was higher 14 out of the 19 times and the average gain was 15.8%, he added.

See Also: Best Small Cap Stocks

Why It’s Important: The S&P 500, a measure of broader market outperformance, ended 2023 with a gain of 24.23%. Looking ahead, analysts are wary about rich valuations tempering market optimism. Most are of the view the mega-cap tech rally that fueled much of the market upside in 2023 could temper, leaving the burden of supporting the market on the smid-caps.

In his tech predictions for 2024, Deepwater Asset Management’s Gene Munster said the iShares Russell 2000 Growth ETF IWO will outperform the SPDR S&P 500 ETF Trust SPY, with sub-$20 billion tech companies likely outperforming large-cap companies.

The upward market momentum hinges on the Federal Reserve beginning to reverse its rate hikes and the economy averting a hard landing.

The SPDR S&P 500 ETF Trust SPY, an exchange-traded fund that tracks the S&P 500 Index, ended Friday’s session down 0.29% at $475.31, according to Benzinga Pro data.

Read Next: Larry Summers Says Declaring ‘Proverbial Soft Landing’ Is ‘Premature,’ Asserts Inflation Still A ‘Source of Concern’

Photo via Shutterstock.

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Posted In: Analyst ColorLong IdeasNewsTop StoriesMarketsTrading IdeasBZ Data ProjectExpert IdeasRyan DetrickStories That Matter
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!