U.S. equities and S&P 500 related exchange traded funds are nearing record highs yet again as consumer cyclical stocks help support the gains.
The S&P 500 Index, along with related funds including the SPDR S&P 500 ETF (NYSEArca: SPY), iShares Core S&P 500 ETF (NYSEArca: IVV) and Vanguard 500 Index (NYSEArca: VOO), were up 0.50% Wednesday.
U.S. stocks have enjoyed a strong rally since Donald Trump’s November election win as the President-elect promised a number of expansionary economic policies, such as cutting taxes, curbing regulations and raising fiscal spending, to help stimulate growth.
However, the equities market remained in a sideways trend over the past few weeks as investors evaluate whether or not the markets can maintain its momentum in face of high valuations and a tightening Federal Reserve.
“We’re mildly positive for 2017 as a whole,” Supriya Menon, a senior multiasset strategist at Pictet Asset Management, told the Wall Street Journal. “You’ll have this downward pressure on” stocks from central banks scaling back stimulus. “However, macro momentum should continue.”
Consumer discretionary stocks led the advance in the S&P 500 on Wednesday, rising 1.4%, followed by a 0.9% gain in the financial sector.
Supporting the strength in discretionary names, General Motors and Ford Motor climbed after the auto makers revealed better-than-expected December sales numbers.
Markets were also waiting on the Fed to release minutes from its last policy meeting at 2 p.m. Eastern, which would provide investors with further clues on how the central bank is planning its monetary policy for the year ahead.
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