Investors are waiting to see how the economy holds up to the most hawkish Fed policy in decades. A drop to 3,000 would be a peak-to-trough decline of 37%. The most bearish year-end price target is 3,225 from Piper Sandler's Michael Kantrowitz, and Morgan Stanley's Mike Wilson says he expects the index to drop to somewhere between 3,000-3,300 before jumping back to 3,900 by year-end. The median S&P 500 price target for the end of the year is 4,000. That would be a 58% drop from the index's January 2022 peak at around 4,766.īut most strategists at major banks see a far milder outcome. Grantham said recently that the S&P 500 could fall to 2000 in a tougher economic environment. He has company in Jeremy Grantham, who also called the 20 crashes. Hussman's call for 60% potential downside is among the more extreme outlooks in the market. "When extreme valuations are joined by ragged internals, the collapses come seemingly out of nowhere – the phrase 'trap door' is intentional." Hussman's track record - and his views in context Both included several extended bear market rallies (which is how I would characterize the advance since October) with no sustained improvement in our gauge of internals," he said. "It's tempting to observe the market advance since October and imagine that neither valuations nor internals matter. He said the S&P 500 could fall 60% peak-to-trough and that he expects it to average -2% yearly returns over the next 12 years. Hussman said this combination of high valuations and poor investor sentiment (which Hussman refers to as "market internals") is bad news for the market and creates a "trap door" scenario. Account icon An icon in the shape of a person's head and shoulders.
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