Moderate Gains For Sp 500

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Moderate Gains For Sp 500

Citi Forecasts Moderate Gains For S&Amp;Amp;P 500 In 2h24

While some analysts believe that the S&P 500 index will go through a correction in the 2nd half of 2024, Citi analysts have something else to say.

According to Citi, the S&P 500 will continue with its gains during the 2H24 but the pace will be a little slow as compared to the 1H24.

High Valuations Are Justified - Citi

Overall, Citi has maintained an optimistic outlook for the S&P 500 despite all the concerns about recession and higher rates. It seems that the macroeconomic worries are countered by the massive growth in the AI sector.

Given the performance during 1H2024, Citi believes that moderate gains are expected during the 2nd half of 2024. Citi analysts also commented on how most of the gains in the S&P 500 were driven by mega-cap companies like Nvidia.

The notes from Citi also discuss the market cap of the top 7 tech companies. According to them, the market cap of these companies is up by 31% year to date and has led to 15.6% gains in the S&P 500.

Citi analysts believe that the concerns about the tech bubble are not entirely true. According to them, today's fundamentals are very different from those of the dot com bubble. To add credence to their view, they have mentioned that growth is coming from multiple sectors rather than a single one.

So, while the valuations of the Mag 7 stocks are standing at historic highs, Citi believes that it is justified based on the earnings growth.

For the S&P 500 index, Citi has also forecasted a 6.3% YoY EPS growth for the year 2024. They also added that the growth of the S&P 500 will be driven by the top tech companies present in the index.

While the Citi analysts are hinting at more upside for the S&P 500, others such as Goldman Sachs are warning the traders about the upcoming correction.

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