The US market has had a stunning run over the past year or so. The S&P 500 index peaked in January 2022, before declining 25.4 per cent over the following nine months in the wake of rapidly increasing interest rates. Since those October 2022 lows, the market has rebounded 40.5 per cent. In recent weeks it’s surpassed the peak from two years ago, moving past 5000 points for the first time. Against that backdrop, is it too late to invest in US stocks?

It’s starting to look like the US Federal Reserve might’ve done the impossible (or at least the very rare) and achieved a soft landing. If that’s the case, there’s no need for these high interest rates to overstay their welcome and cause an unnecessary recession. For investors, this would make for a much more attractive backdrop. It could mean markets perform better than many expect from here, and that the long-awaited collapse in prices some have been calling for might not come. If that’s the case, those patiently waiting for that lucrative buying opportunity to emerge might find themselves left behind. It might be time to acknowledge what could go right, just in case the Fed’s done the unlikely and pulled this off.

Last week was a very good one for world sharemarkets. The S&P 500 in the US posted a 1.1% gain, having hit a new record high this month as inflation and economic indicators added to confidence a soft landing can be achieved. European shares surged 3.2% last week, the UK market rose 2.3%, and the Australian ASX 200 posted a 1.8% gain. The local market also had its best week since early November, with the NZX 50 gaining 1.8%. Looking ahead, this coming week is shaping up as a very busy one. In the US, the highlight will be the first Federal Reserve meeting of the year, while on the data front we'll get the latest ISM manufacturing index and the monthly jobs report. Here in New Zealand, the highlight of the week will be the ANZ Business Outlook survey for January. Markets will also be watching Reserve Bank of New Zealand Chief Economist Paul Conway’s speech on Tuesday morning, to get an update on how the central bank views some of the recent data. It'll be another busy week of earnings releases- too, with 75 S&P 500 companies scheduled to announce results. Big tech will be in focus, with Alphabet, Microsoft, Amazon, Apple and Meta all due to report.

Should I pay off the mortgage faster, or use that extra cash to invest? This is a very common question, but it’s especially relevant today. Mortgage rates are at 15-year highs, with borrowing costs at levels many homeowners won’t have experienced before. Paying down the mortgage as quickly as you can is sensible, and it’ll set you on the path to financial freedom. However, it’s not black or white and using some of that spare money to invest along the way will also pay off.