Stock at Relentless Record Highs: What's Next?

The S&P (SPY) closed the second half of 2024 with its best gains not seen since late April. At 5,567.19, the index may reach 5,600 within days. Several brokerages set a 5,600 target for 2024. They will need to raise the target or issue a warning if the index reaches its price prediction.

What happens from here?

Markets will buy stocks that are on a strong uptrend and will avoid under-performing sectors. They will buy magnificent seven stocks, ignoring valuation risks. For example, Adobe (ADBE), Qualcomm (QCOM), Nvidia (NVDA), and Tesla (TSLA) were among the winning picks last week. In the retail sector, Costco (COST) and Walmart (WMT) gained as investors bought the strongest brands.

Investors avoided companies that posted disappointing results and issued a warning for the rest of the year. Nike (NKE) fell, pulling Deckers Outdoor (DECK) lower. In the household and personal products sector, investors sold Estee Lauder (EL), Kenvue (KVUE), and Clorox (CLX).

Residential construction firms recently peaked. Lennar (LEN), D.R. Horton (DHI), and PulteGroup (PHM) are stuck in a downtrend.
Natural disasters kept investors away from Carnival Cruise (CCL) stock. Hurricane Beryl will cause enough destruction that will trigger insurance firm damage payouts.

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