Investors are closely following the public offerings by Arm and Instacart to gauge the state of the stock market. Recent developments indicate a positive outlook.
Arm, the UK-based chip designer, experienced a 25% surge in its stock price on the first day of trading, and the gains have sustained. Additionally, Instacart has raised its IPO target price, leading to a valuation of $10 billion. Both developments indicate a positive momentum for these companies.
These positive trends align with the results of a Vanguard survey, where investors predicted a 5.5% increase in stock prices over the next 12 months. The survey also showed steady expectations for long-term returns.
It’s the economy
Xiao Xu, an analyst in Vanguard Investment Strategy Group, noted that despite a temporary pause in the market rally in August, investor expectations remain high as summer ends.
These positive sentiments towards stocks are driven by stable economic expectations. The odds of an economic disaster have consistently decreased throughout the year.
Rhea Thomas, an economist at Vanguard, emphasized that the economy has managed to grow above trend despite interest rate hikes. Consumer spending, the key driver of GDP growth, remains resilient.
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