As stocks continue to correct it’s important to maintain a degree of perspective as the fall in the US broad-based S&P500 now nudges 25% and it’s blown out to 34% for the growth/tech based NASDAQ:
- Of the previous 12 recession inspired corrections since World War 2 the average decline is 30% although on 3 occasions the fall has punched out closer to 50%.
Bear markets usually experience plenty of sharp countertrend bounces but backing stocks in general to reach an ultimate low in the short-term is optimistic in our opinion. Considering the artificial “free money” high that markets reached in 2021 MM believes an ultimate decline of well over 30% cannot be discounted but with the increased panic washing through the market and press alike the greater the likelihood in our opinion that a sharp countertrend rally is just around the corner i.e. can the backdrop get any worse for equities over the coming months?
- Unfortunately we now feel fresh all-time highs is years now months away and it’s still all about stock / sector rotation until further notice.
MM is neutral US equities
Add To Hit List
