Stock Market ‘Unstoppable’ as S&P 500 Reaches 43rd All-Time High Despite Economic Turmoil
The stock market’s benchmark index, the S&P 500, has experienced a remarkable rally, surging over 20% this year and currently marking its “biggest gain since 1997”. This impressive performance is occurring amidst escalating geopolitical tensions and concerns about a potential financial crisis.
According to the Kobeissi Letter on X (formerly Twitter), the S&P 500 has nearly doubled last year’s 11.7% increase, making it the third-best performance since 1990. Additionally, it has achieved the “best start to a presidential election year in history”.
As a result, the index reached its 43rd all-time high this year, surpassing the 70 new records set in 2021. Since hitting a low in October of last year during a correction phase, the S&P 500 has soared by 40%.
BREAKING: The S&P 500 rallied 20.8% in the first 3 quarters of 2024, posting its biggest gain since 1997.
This is nearly DOUBLE the 11.7% increase seen last year and the third-best performance since 1990.
The index also recorded the best start to a presidential election year in… pic.twitter.com/dhddfHKOrV
— The Kobeissi Letter (@KobeissiLetter) October 3, 2024
The Kobeissi Letter describes the current market as “unstoppable”. This rise in the stock market coincides with a surge in investors turning to safe haven assets, particularly gold. Exchange-traded funds (ETFs) focused on gold and gold miners have experienced $3.3 billion in inflows since August.
Driven by this “historically high demand”, gold is on track to achieve its best annual return since 1979. Its price has risen by 28% year-to-date, reaching $2,645 per ounce. In comparison, one year ago, gold was valued at slightly over $1,800.
The surge in the price of gold is occurring as the total money supply in the United States, Eurozone, Japan, and China reaches a record $89.7 trillion, having increased by a remarkable $7.3 trillion over the past year.
Gold’s recent rise was triggered by Iran’s firing of approximately 180 ballistic missiles at Israel, which was claimed to be in retaliation for the assassinations of Hamas’s political leader and an Iranian commander.
Notably, Societe Generale has shifted its entire commodity allocation to gold, with 7% of its total asset allocation being held in the precious metal. This move reflects a 40% increase quarter-over-quarter and signifies growing confidence in gold as a safe-haven asset amid global uncertainties.
Featured Image via Unsplash.