As The Market Reaches New Highs, Big Players Stay Confident — Should You?

Market Overview - The S&P 500 has reached 28 all-time highs in 2025, with September recording the highest number of new all-time highs since 2017 [3] - The median year-end forecast for the S&P 500 in 2025 was initially set at 6500 but was adjusted downwards after a market decline, now reflecting a modest 2% gain from a previous 13% target [4] - Analysts have revised their earnings growth expectations for the S&P 500 to 9.4% for the year, up from 7.1% shortly after Labor Day [4] Investor Sentiment - The BofA Global Fund Manager Survey indicates a bullish sentiment among 196 surveyed money managers, with the sentiment measure rising to 5.4, the highest since February 2025 [5] - Growth expectations among these managers saw their largest increase since October 2024 [5] Interest Rate Expectations - A significant 59% of surveyed managers anticipate either 2 or 3 rate cuts within the next 12 months, while only 6% expect an increase in short-term rates [6] - The percentage of managers expecting higher inflation has risen to 49%, up from just 9% in September 2024 [6] Market Performance - The Dow Jones Utility Average was the best performer for the week, gaining 2.3%, while the SPDR Gold Share increased by 2.2%, marking a year-to-date gain of 43.2% [8] - The S&P 500 experienced a slight decline of 0.3% for the week, with 1092 advancing issues and 1724 declining on the NYSE [9] Technical Analysis - The S&P 500 has surpassed its four-week highs in August, with a yearly resistance level at 6469 now acting as support [10] - The advance/decline line for the S&P 500 has been declining but remains above its weighted moving average, indicating a positive trend despite recent market fluctuations [11] Cash Levels and Market Dynamics - The FMS cash level was unchanged at 3.9% in the latest report, with higher levels in the 4.5-5% range deemed necessary to support further market rallies [13] - The bull-bear percentage differential shows a slight increase, with 41.7% bulls and 39.2% bears, indicating a bullish sentiment among investors [15]