S&P 500 Could Rally Beyond 5000 in the Coming Months
«You can't fight the Fed» is a famous refrain repeated by most market participants throughout the years. Unfortunately, it is just not true. The truer statement is that «you can't fight the market.» Along these lines, I just read a bearish article and saw this comment, which also received a high number of «likes:»
«Occam's razor dictates that this is simply the Fed manipulating the market upwards with their talk of rate cuts. You don't want to fight the Fed, unless the banksters decide that the other direction is where they want to go next.»
Sadly, this perspective is parroted by many, but it means absolutely nothing. And, there is absolutely zero proof to this claim. In fact, the market had rallied 1100+ points before the Fed «manipulated the market upwards with their talk of rate cuts.» But, why be burdened by the facts when a story sounds so much better?
Unfortunately, too many attempts to correlate rates and the stock market. As I have been trying to explain, the TLT (a long-term bond ETF, which is an indirect way to also track interest rates) is now EXACTLY where it was (in the 99 regions) when the S&P 500 was striking its 3500SPX low — in other words, when it was 1300 points (37%) lower.
The difference is that we are now almost at 4800SPX with the TLT at the exact same point as it was when the SPX was at 3500. So, while rates kept many investors bearish of the market for all of 2023, I am quite sure none of them recognize this fact.
Those who maintained the belief that you cannot fight the Fed lost their ability to foresee a 21% rally in TLT, as they maintained an expectation of continued rate hikes due to the Fed. Moreover, and worse yet, those who maintained the belief that you cannot fight the Fed lost their
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