The S&P Hits 4,000 for the First Time in History

The bulls are running on stimulus and clean energy and manufacturing hitting its stride.
KellyApr 01,2021,16:09

Stocks are up across the board, with the tech-heavy Nasdaq continuing to recover after struggling for the last few weeks. But the real story here is the S&P, the only index any index investors should consider playing. Uncreative as index investing might be, the S&P has shown to be a solid bet over time. It just reached 4,000 for the first time in history--and it doesnt look like it is stopping there.

The S&P 500 gained about 0.7% shortly after the opening bell before breaking above 4,000 for the first time. EV stocks in particular gained ground on President Joe Biden's more than $2 trillion infrastructure plan.

Historically, April has been the second best month for stocks. The stocks that do particuarly well during this month and the second quarter more generally, are big cyclical stocks in sectors like energy and indsutrials. This year, as the economy reopens, investors should expect those stocks to perform strongly.

"I think we’re going to see more of the same in terms of market leadership. This is an environment in which the economy is likely to accelerate,” Kristina Hooper, Invesco chief global market strategist, told Yahoo Finance. “And I think that means that we’ll see continued outperformance of areas like energy, like financials, like consumer discretionary, material, industrials — those areas of the stock market that are most sensitive to the economy.”
That economy might now see 6% GDP growth in an acceleration of the American economy unseen since 1984. Investors should play both the S&P broadly though the SPDR S&P 500 ETF Trust (SPY) as well as both specific companies and sector-specific ETFs poised to benefit signficantly from Biden's massive stimulus and infrastructure plans. Biden is spending trillions to "Build Back Better," and stocks like MP Materials Corp (NYSE: MP) and Vulcan Materials Company (NYSE: VCM) stand to benefit. These two massive companies have dipped recently after rising for months on Biden's electoral victory. While investors should not expect to see huge short-term upside, these stocks are worth buying at their current price points and should be held for 12 months or more.

Topics:S&P, Stocks,