The S&P 500 (^GSPC) briefly reached an all-time high of 5,000 points before the close of trading on Thursday, much to the delight of many investors. What happens next when this index officially reaches this peak? How will the market behave going forward?
Dan Griffith, Director of Wealth Strategy at Huntington Private Bank, speaks with Yahoo Finance about the S&P 500's intraday high and what it means for the broader market.
“We think there is a possibility of a slowdown, and we have a 50-50 chance of going into recession in 2024.Frankly, we've probably seen that trend for the last two years, which is great. 'The market was a little less optimistic than we were, but now it's coming in the other direction…' commented Griffiths. “Ultimately, we think that [Federal Reserve] As the weather gets a little warmer, rates will probably be lowered a few times. Probably three times our guess. And if there is a slowdown, it will be quite modest. ”
For more expert insights and the latest market trends, click here to watch the full episode of Yahoo Finance Live.
Editor's note: This article was written by Nicholas Jacobino
video transcript
Josh Lipton: On this day, the S&P 500 index slowly rose, but the index briefly reached the 5,000 level for the first time in history. The index has continued its upward trend since the beginning of the year, supported by economic indicators and strong performance. Dan Griffith, Director of Wealth Strategy at Huntington Private Bank, explains what that 5,000 mark means for the economy.
Dan, nice to meet you. So we were just knocking on that door. We like big round numbers, right? Dan, you said something interesting, but really, what's this going to be like, you think this is going to be a year where investors take a little breather in the stock market? I think I said that. what did you mean by that?
– I think that's what it means. I think one of the themes this year is that we're a little bit bound by scope. There are many optimistic views, but there will also be many cautiously optimistic views. 0 And when we hit these big numbers in the past, we've seen the market kind of test it out and kind of come back and go up again. And I think that's probably the case here too.
Julie Hyman: Why do you think that is? I mean, we've been talking about this topic recently, and it seems to have a strong background, right? We have earnings that are just coming in, beating expectations at a faster pace than they have in recent quarters, economic growth continues to beat expectations, and, as you know, stock prices continue to set records. So what exactly is the problem?
– Well, I think I agree with you that a lot of the fundamentals are pointing in the right direction. I mean, if we look at what are the core fundamentals that we monitor most closely, a lot of the things you mentioned, Julie, we're looking at what unemployment looks like. Do you have it?
Will we continue to see as good numbers as we had earlier this week, today, and a few weeks ago? Let's take a look at what the core inflation numbers are. They continue to look very positive. Maybe not quite the 2% the Fed wants, but they look very solid. As you know, consumer confidence remains strong, even in the manufacturing sector, which does a lot of business in Huntington.
They continue to look solid and there's a lot of optimism both in the overall numbers and when we're talking to clients individually, they're also showing optimism. So I think the question really is, as you said before, what could go wrong. I think it's more like trying not to think that things are going to go incredibly well, and trying to be optimistic. As I mentioned earlier, that's why rangebound is a theme.
Josh Lipton: Dan, you're trying to gauge where the economy is going in 2024, and you want to know whether it's going to be a soft landing or a recession, how do you measure that? • What is the data? What are the financial metrics you are looking at?
– I think a lot of it is what I mentioned earlier, and I think we could see a slowdown. As for the recession, it's 50-50, meaning he has a 50-50 chance of going into a recession in 2024. Frankly, it's been like that for probably the last two years and, you know, we're in a great place.
The market was a little less optimistic than we were, but now it's kind of come the other way and we've run into where we are in Huntington. But at the end of the day, I think we think that once the weather gets a little warmer, the Fed will probably cut rates two or three times, maybe three times is our guess – our guess.
If there is to be a slowdown, it will be fairly gradual, and as far as markets are concerned, we remain optimistic about what the future holds.
Julie Hyman: What are you hearing from your clients? I mean, as you said, you're dealing with a lot of manufacturing clients, you're in private banks, you're talking to wealthy individuals. .
– yes.
– What are your impressions?
– Well, I think there are many people who are worried. What worries a lot of people is that we had a very good market, especially last year. Everyone was worried about the recession. But what I'm hearing from my clients is that they're much more prepared than they used to be. Many companies, whether publicly traded or privately held, will brace themselves in 2022 for an impending recession in 2023.
And of course, as we all know, that didn't happen. Therefore, I think many companies will start 2024 by factoring in things like interest rates a little more. They're just starting 2024, they're well prepared for some volatility, and frankly their balance sheet looks pretty good, so it's very cautious optimism, but optimism nonetheless.
