“Will the S&P 500 End 2020 Above 4600?

As the year 2020 comes to an end, investors have begun to assess the performance of the S&P 500 and consider whether it could reach the 4,600 before the year closes. The S&P 500 hit its all-time high in August 2020 and after that, it has been trending sideways with some volatility. It has gone through some good-sized dips as investors have digested news on COVID-19, stimulus negotiations, and the upcoming election. With a near-term target of 4,400 in sight, it is no surprise that investors are now turning their attention to the possibility of the S&P 500 pushing above the 4,600-mark before the year-end. A few reasons contribute to this long shot possibility. Firstly, the stock market is getting an injection of liquidity from central banks. The Federal Reserve and other central banks have made huge efforts to support the economy with quantitative easing and other measures, all of which could put some upward pressure on the S&P 500. Secondly, the withdrawal of long-term bonds from the money market has created a liquidity crunch, which has raised demand for stocks as investors seek returns. This trend of investor money seeking greater returns has helped push the S&P 500 higher, making it possible for the index to edge higher at least for some near-term upward movement. Thirdly, the fourth-quarter earnings season is already in full swing and most companies are meeting or beating Wall Street earnings expectations. This is good news for investors, since strong earnings usually lead to higher stock prices. Finally, if the U.S. and Europe reach a trade agreement, there could be positive market sentiment, and the S&P 500 could benefit from this. While there is no guarantee that the S&P 500 will manage to reach the 4,600 mark before the year-end, a combination of increased liquidity, strong earnings, and geopolitical outcomes could pave the way for the index to make that final push. If that were to be the case, it could provide the spark that could help the index to reach or exceed its pre-pandemic highs by the year’s end.