SPY - SPY ETF: Momentum Is In The Cards
2024-05-10 13:34:14 ET
Summary
- We believe most of the SPDR® S&P 500 ETF Trust's risk factors are misinterpreted, and therefore, upgrade the vehicle to a Buy rating.
- The U.S. yield curve is expected to decrease, which could lead to a rise in credit spreads and the equity risk premium. However, we expect yield curve dominance.
- In our view, the SPY ETF's elevated CAPE ratio is justified by the growing representation of technology stocks and its robust earnings-per-share outlook.
- Most of our identified risk factors derive from technical aspects such as potential VIX mean-reversion and pessimism among options traders.
- We think the SPDR® S&P 500 ETF remains a prime asset allocation opportunity for the remainder of the year.
Today's article examines the SPDR® S&P 500 ETF Trust ( SPY ) , an S&P 500 tracking vehicle managed by State Street. We have covered the SPY ETF on numerous occasions during our tenure on Seeking Alpha, with our latest coverage taking place in September 2023. In that article, we argued in favor of a Hold rating based on uncertain economic growth and unaligned valuation multiples. Our analysis today revises that outlook; herewith are our latest findings....
SPY ETF: Momentum Is In The Cards