Stock Market Momentum

The stock market is expected to continue its upward trend, with Brian Belski of BMO raising his S&P 500 price target to 6,100. This prediction is based on a combination of factors, including the Federal Reserve's recent rate cut and favorable seasonal data. Belski believes that the market will finish the year strong in the fourth quarter, especially since the Fed has shifted to easing mode.

In the past, when the S&P 500 was higher by about 15% to 20% in the first nine months of the year, it saw an average fourth quarter return of about 6%. This suggests that the current market momentum is likely to continue. Additionally, the stock market rally has been broadening out to other sectors and smaller-sized companies, which is a positive trend. Belski also believes that the likelihood of a soft landing in the US economy is increasing, which justifies elevated valuations. A soft landing would mean that the economy will continue to grow, but at a slower pace, which is a more sustainable scenario.

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