After pullback, S&P 500 to hit “new highs”

The S&P 500 rose 1.3 percent on Monday amid a slew of corporate dealmaking activity and optimism toward a coronavirus vaccine.

“Part of this move is from renewed hope for a vaccine,” said Peter Cardillo, chief market economist at Spartan Capital Securities, after AstraZeneca resumed phase three trials for its COVID-19 vaccine in the UK and Pfizer announced that a vaccine could be distributed in the US before the year-end.

“September has thus far lived up to its reputation, but I think that’s reversing again,” Cardillo said.

Meanwhile, Tony Dwyer, chief market strategist at Canaccord Genuity, said that the stock market’s September pullback was likely the first of many but he expects the bull market to persist nevertheless.

“The 7% correction in the S&P 500 SPX, +1.27% over the past six trading sessions is likely the first of a few 3-7% drawdowns followed by new highs as the market stair-steps higher like the fall of 2009, driven by election-year angst and the extended nature of the market-cap-weighted indices,” he said.