U.S. Stock Market: 4-Year Winning Streak, 5th Year Outlook

The S&P 500 rose 0.59%, the Nasdaq increased 0.64%, while the Dow Jones Industrial Average led the market's strength with a 0.83% gain.

Capital is rotating from technology stocks to financial and healthcare sectors.

Telecom stocks T-Mobile and AT&T fell sharply on news of SpaceX's market entry.

Brent crude rose 0.28% to $104.41 per barrel, indicating continued oil price instability.

With the 10-year Treasury yield maintaining around 5.24%, sensitivity to interest rate hikes persisted, limiting Bitcoin's upward momentum.

The S&P 500 and Nasdaq continued their upward trend, supported by the 50-day moving average, with the Nasdaq confirming its previous high as a support level.

Conversely, the Semiconductor Index (SOX) entered a temporary lull due to divergence.

The 1-year expected inflation rate slightly decreased to 4.76%, showing an improvement in inflation indicators.

However, the preliminary University of Michigan Consumer Sentiment Index fell to 46.3, indicating that rising living costs and labor market concerns are dampening consumer sentiment.

According to Bank of America data, institutional investors maintained their selling trend, net-selling $1.06 billion over the past week.

In contrast, retail investors turned to net buying for the first time since July, with hedge funds and individuals currently leading the buying in the market.

Given that memory prices account for $379 and memory volume $64, and the memory segment comprises about 40% of total revenue, further growth potential is a key market focus.

With benchmark indices surging over 115% from the October 2022 low, the market continues its bull run.

If there is no sharp drop on Friday, it will be the 7th time since 1957 that the market has recorded four consecutive years of gains, a historically rare phenomenon.

Looking at data for the fifth year after four consecutive years of gains, all but one instance showed further increases, with an average return of 12% and a median of 15% expected for this period.

Economic growth and robust corporate earnings support the bull market. FactSet analyzed that S&P 500 companies, which have maintained over 25% growth for three consecutive quarters, are expected to record a 30% increase in earnings year-over-year this quarter. Economic growth and strong corporate earnings underpin the bull market. This is expected to mark three consecutive quarters of over 25% earnings growth, supporting the bull market.

This is expected to mark three consecutive quarters of over 25% earnings growth, with robust corporate earnings serving as a key factor supporting the current bull market.

Rising Treasury yields due to AI investments and corporate debt issuance led to continued selling of risky assets. Considering the sound state of the U.S. economy, the current market is in a temporary mid-cycle adjustment, not a recession.

The increase in Treasury yields is attributed to AI investments and increased corporate debt issuance, while the selling of risky assets is analyzed as a process of resetting interest rate expectations and invigorating the economy.

The decline in bank stocks such as JPMorgan (-7%), Goldman Sachs (-15%), and Bank of America (-16%) was attributed to concerns about loan contraction due to interest rate hikes.

However, analysts suggest the market is overlooking how the Fed's tightening policy could expand loan profit margins, and actual signs of recession are not appearing.

Considering that the U.S. economy is far from a recession, the current weakness in bank stocks presents a buying opportunity. Wells Fargo is deemed an ideal stock to hold as its operational plans are unaffected, and Bank of America is expected to see revenue growth from refinancing maturing assets at high interest rates. Wells Fargo is considered an ideal stock to hold with no disruptions to its operating plans, and Bank of America is expected to see revenue growth from refinancing maturing assets at high interest rates.

KeyCorp is anticipated to benefit from commercial loan growth, increased investment banking revenue, and the return of manufacturing bases, while PNC is highlighted as a leading lender poised to benefit from increased commercial loans.

Five of nine analysts rated it a buy, three held, and one sold, projecting an average upside potential of 14%. With SpaceX's entry into mobile services, telecom tower REITs like American Tower rose over 6%, but T-Mobile and others fell 10% due to competition concerns. Experts projected an average upside potential of 14%, with 5 out of 9 analysts maintaining a 'buy' rating.

Five out of nine analysts rated it a buy, three held, and one sold, suggesting an average additional upside potential of 14%.

Conversely, AT&T, Verizon, and T-Mobile saw declines due to competition concerns with SpaceX, with T-Mobile recording a significant drop of 10%.

Among 32 evaluators, 4 gave a strong buy, 13 a buy, and 15 a hold rating, with an average estimated upside potential of 21%. Despite rising operating costs and macroeconomic uncertainties, American Express continues its virtuous cycle investment strategy.

Since October last year, concerns about cloud business growth have eased, and revaluation of business value based on AI model performance continues, leading to a positive shift in investor sentiment.

According to Keith Lerner, among 11 bull markets since 1950, 5 out of 6 cases that reached their fourth anniversary continued their upward trend.

Market valuation adjustments and robust corporate earnings form the foundation of the current bull market. The market is holding up well at current interest rates and is expected to maintain resilience even if rates rise to 6%.

The fact that 2027 corporate earnings forecasts are being revised upwards, not downwards, serves as a positive signal for the continuation of the bull market.

The discrepancies in OpenAI's revenue figures do not indicate a decrease in customer demand, and operational metrics remain encouraging.

While substantial growth, with enterprise revenue more than doubling since July, has been confirmed, AI-related stocks are priced on the premise of perfect execution, exposing vulnerability to rapid market reactions even from revenue confusion.

Tony emphasized the importance of strictly differentiating between trading volume and a company's actual earnings when investing.

Its enterprise value of $18 billion at the time of investment was considered to have significant upside potential. Differences in the timing of reviewing OpenAI and Anthropic, and their respective operating models, influenced the investment decision.