S&P 500 to hit new record highs above 5700: BTIG By

-- BTIG analysts predicted in a note Friday that the will break through to new record highs,Global Forex Dealer Regulatory Platform potentially exceeding 5700 within the next week or two.

The analysts cite the shifting odds of a Federal Reserve interest rate cut at the upcoming Federal Open Market Committee (FOMC) meeting as a key driver behind this bullish outlook.

"The biggest news in the last 24 hours has been the shift in odds for a 50bps cut," BTIG said, noting that just 24 hours ago, the likelihood stood at about 15%. That probability has now surged to between 45-50%.

This change has already bolstered market activity, especially in small-cap stocks, which were up around 1% pre-market.

BTIG also pointed to rising gold prices, now at fresh highs, and silver up by 70 basis points. They reiterated their view that ETFs like IWM, XOP, GDX (NYSE:), and SLV are poised for further gains.

The S&P 500 is currently about 1% away from an all-time high. BTIG noted the parallels to the Fed’s rate cut cycle in 2007 when the market rebounded from a significant drawdown and reached a marginal new high before entering a downturn.

However, the firm highlighted the differences in today’s market, particularly with credit spreads remaining stable.

"This time around, spreads saw a little widening in August, but have been steady the last few weeks around 130bps."

While BTIG sees a move above 5700 as imminent, they caution that after the FOMC meeting, investors should evaluate the risk/reward balance, as a potential "sell the news" scenario could emerge. In the near term, the analysts favor small-cap stocks over mega-cap tech, expecting better performance in that sector.

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