Will The S&P 500 Index Enter a Bull Market In July?

A recent CNBC “Delivering Alpha” survey reveals that most Wall Street investors believe the stock market has entered a new bull market in 2023. Investors also expect the U.S. economy to remain strong and dodge recession fears this year.

The survey reportedly collected opinions from approximately 400 individuals, including chief investment officers, equity strategists, portfolio managers, and CNBC contributors who handle money, asking them about market predictions for Q3 and beyond.

About 61% of those surveyed are optimistic that the market is entering a new period of growth, known as a bull market. The remaining 39% anticipate a temporary market uptick within a general downtrend or a bear market rally.

Going by the book, some people have already proclaimed the onset of a new bull market since the S&ampP 500 has risen 20% from its low point in October, a basic criterion for a bull market. However, some investors donU+02019t consider it the end of a bear market until the S&ampP 500 hits a fresh high. The record closing high for the wider index is 4,796.56, while it closed on Thursday at 4,396.44.

Despite concerns about rate increases, a debt ceiling debate, and a series of bank failures, the market has held its ground this year. The S&ampP 500 is on track to finish the yearU+02019s first half with a significant increase of nearly 15% following four consecutive months of gains. The tech-heavy Nasdaq Composite has performed even better, soaring by 30% this year, largely thanks to Wall StreetU+02019s keen interest in artificial intelligence.

Carol Schleif, the Chief Investment Officer at the BMO Family Office, suggests that there are plenty of reasons to be positive about U.S. stocks in the latter half of 2023, especially since the market is showing more variety.

Most investors predict the economy will steer clear of a serious downturn this year, despite the Federal ReserveU+02019s rapid rate increases. The Fed raised rates at every meeting from March 2022 onwards, making four consecutive three-quarter point hikes before taking a breather in June.

The exceptional conditions of an unprecedented pandemic, which led to historic fiscal and monetary responses, may bring about a unique economic downturn.

Jason Draho, the Head of Asset Allocation Americas at UBS Global Wealth Management, suggests that we may see rolling recessions affecting different sectors rather than a typical, all-encompassing recession.

For the rest of 2023, investors anticipate the best returns from short-term Treasuries and the S&ampP 500 and overseas stock markets like Japan, China, and Europe.

Jobs market and payrolls report

Updates on the job market are due this week. The Bureau of Labor Statistics (BLS) is set to publish the Job Openings and Labor Turnover Survey (JOLTS) report on Thursday. This report will reveal the number of May job openings, hires, resignations, and layoffs.

Predictions suggest a drop in job openings to 9.9 million from 10.1 million in April. ADP (NASDAQ: ADP), a payroll provider, will also release its report for June on the same day, showing private sector job growth expected to be around 180,000.

On Friday, the June nonfarm payroll report will be out. Experts believe U.S. businesses added 200,000 jobs in June, a slowdown from the unexpected increase of 339,000 in May. The unemployment rate is likely to hold steady at 3.7%. If job creation beats these forecasts, it could support the Federal ReserveU+02019s argument for additional rate increases to manage the economy and curb inflation.

The Federal Reserve will make the minutes from the latest FOMC meeting public on Wednesday. During this meeting earlier this month, the central bank kept interest rates unchanged. This came after ten consecutive rate increases from March of the previous year, aiming to control the highest inflation in 40 years.

Market traders predict that the Fed will start raising interest rates again at its policy meeting in July. According to data from CME Group, there is a 90% chance of a 25 basis points (0.25%) increase. This could put the key federal funds rate at 5.25% to 5.5%, the highest in 22 years.

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