The last full trading week for the market has buying momentum that will attract more bullish investors. Investors who already missed the S&P 500 rally may bet on interest rate cuts. That would see the 30-year bond (TLT) and 10-year bond (IEF) rising from here.
Goldman Sachs increased its 2024 year-end target for the S&P 500. The target of 5,100 would imply that the SPY ETF is a buy. VOO and IVV ETFs would also rise if Goldman’s forecast plays out.
Left behind in the 2023 year-end rally is the energy sector. After attacks in the Red Sea by Yemeni Houthi militants, tanker ships are looking for alternate routes. WTI crude prices added 1.58% on Dec. 18. Slower shipments of oil could send oil prices back to at least $80 and as high as $90. The biggest energy firms are Chevron (CVX), Exxon (XOM), and ConocoPhillips (COP).
The oil ETFs include VanEck Oil Services (OIH).
Morgan Stanley picked over 30 companies that had high free cash flow, EPS growth, and an overweight rating. Valero (VLO) and Marathon Petroleum (MPC) could join the year-end rally. NextEra Energy (NEE), which bottomed at $50, is well below its 52-week high of $86.47. It has a forward yield of 3.04% and a forward P/E of 19.65%.
