Despite an overall strong performance, warning signs alluding to the fragility of the various facets of the economy have been flashing at an increased frequency in recent months.
The latest of these came from the investment banking giant Piper Sandler, whose chief market technician, Craig Johnson, sent a note cautioning that the summer of 2024 will feature a 10% correction for the S&P 500.
According to the expert, warning signs – such as a lack of breadth and a slowdown in momentum – have been showing up and hint that the growth observable since January can no longer be sustained.
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Johnson also added that most investors remain blind to the danger and cited ‘fear of missing out’ (FOMO) as the big reason for this trend.
Indeed, given just how much some of the best-performing stocks rose since the start of the year – and how bullish the price targets for some of them remain – it isn’t difficult to see why traders are keen to take advantage of the boom as long as possible.
Analysts remain confident in 2024 stock market growth
Additionally, despite certain dangers being well-documented and extensively reported on since the start of the year – a market concentration akin to 1929 and the many voices stating the artificial intelligence (AI) sector has become a feverish bubble – bears have become increasingly few among analysts.
Back in late mate, it was reported that JPMorgan’s (NYSE: JPM) Marko Kolanovic was the last prominent bear on Wall Street and that the banking giant’s S&P 500 price target of 4,200 was the lowest.
Even after the latest warning, Piper Sandler’s price target for the end of 2024 for the benchmark index is comparatively high at approximately 5,050 – just 7.81% below the press time levels of 5,477.90.
Finally, it is worth pointing out that despite the most recent downturn observable across multiple major stocks, the S&P 500 itself, and even the crypto markets, such a trend does not necessarily represent a prelude to the much-discussed crash but may also be a relatively common correction after a staggering, across-the-board rise in the year-to-date (YTD) charts.
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