Analysts at JPMorgan Chase have updated their Wall Street projections, stating the S&P 500 will reach 4,000 points in early 2021 and could be as high as 4,500 points by the end of 2021.

“The outlook is significantly clearing up, especially with news of a highly effective COVID-19 vaccine,” said JPMorgan Chase analysts led by Dubravko Lakos-Bujas, in a note to media.

In a conversation with nestegg, eToro’s market analyst Josh Gilbert shared these bullish sentiments, telling investors to keep an eye out for key themes that are likely to drive the market in 2021.

Chinese stocks

Mr Gilbert pointed to the Chinese economy, which has demonstrated the fastest recovery from the financial downturn, when compared with other major markets.

“With renewed hopes under Biden that the relationship between the US-China can potentially improve, there are big hopes for the Asian markets, specifically in China tech,” Mr Gilbert said.

“Names such as Tencent, Baidu and NetEase are likely to benefit from a more diplomatic union between the two countries.”

Mr Gilbert also pointed to growing e-commerce that is expected to continue into 2021.

“Alibaba recently recorded $56 billion in Singles’ Day sales, exceeding its 2019 high. This data clearly shows a movement towards online sales,” he said.

E-commerce and payment provider stocks

The market analyst said the e-commerce trend is likely to extend beyond China, with consumers spending more time at home following the pandemic. 

“It’s expected that e-commerce and payment provider companies will boom more than ever, as consumers continue to feel more comfortable shopping from the comforts of their own home,” Mr Gilbert said.

The investor pointed to payment companies likely to win in this new world.

“This includes how we pay for products and services, with leaders such as PayPal planning to integrate crypto assets into their platform,” he said.

Cloud computing and AI stocks

Strong gains in computing and AI stocks so far in 2020 is likely to continue in 2021.

In September, Nvidia agreed to buy Arm Holdings for $40 billion as they seek to corner the AI market. 

“This acquisition could be a game changer for Nvidia in 2021, especially as the world continues to adapt to AI technology and cloud computing,” Mr Gilbert said.

As cloud computing continues to play a larger role in daily lives through technology used daily such as email, video streaming and even social media, it is likely to see the major players continue to show strong growth in 2021.

“There are some very big players in the industry already from Microsoft, Google, Amazon and Salesforce, even Snowflake, which went public this year and was backed by Salesforce and Warren Buffet,” Mr Gilbert said. 

Under a Biden administration who is trying to cut spending, Mr Gilbert suggests Palantir could be a big winner. 

“Another software company to go public this year was Palantir Technologies.”

“Their software is perceived to be more affordable, which is likely to be positive for Palantir as we move into a US government under Biden, who is keen to cut spending.” 

“The pandemic has caused government health agencies to increase their investment into software, and I can see Palantir capturing a part of this investment in 2021,” Mr Gilbert concluded.