Fundstrat says stocks are nearing the perfect opportunity to buy a pullback as the S&P 500 faces a rout in August

The merchant was stunned

Reuters/Lucas Jackson

  • Fundstrat said the August stock sell-off is an ideal opportunity to buy on a pullback.

  • Markets will remain nervous about higher interest rates until the end of the month.

  • The Fed’s Jackson Hole seminar could put stocks back on an upward trajectory.

The market rout in August means investors are nearing the perfect opportunity to buy a dip in stocks before they resume their rally, according to Fundstrat research chief Tom Lee.

Lee, who predicted the benchmark would do so Notch set a record in 2023 At 4825, he warned that there is a possibility of further decline in the near term for stocks.

Already, the S&P 500 is down about 5% since the beginning of August. This sell-off was impacted by the weakness of the Chinese economy, as well as stronger-than-expected economic growth in the United States which sent bond yields higher. The Atlanta Federal Reserve estimates GDP growth of 5.8% in the third quarter.

Both of these factors can cause problems for stocks. China’s recession may pose indirect risks to the US, particularly for technology stocks with heavy operations in China. Meanwhile, a strong GDP indicates that the Fed may continue to raise interest rates in an effort to slow the economy, which is likely to affect asset prices. A strong economy is also pushing the timetable for any potential rate cuts, leaving the “higher for longer” narrative for interest rates intact.

“In short, the US inflation story is receding. Instead, the factors of rising interest rates, which are hurting the price-to-earnings multiple and the story of strengthening the US economy, which means risks of further hikes, are at the forefront of mind,” Lee said in a client note on Friday. .

Central bankers have already raised interest rates by 525 basis points to slow inflation, a move that still stands Help weight the S&P 500 down 20% in 2022. Meanwhile, markets are pricing in a 33% chance that the Fed will raise interest rates by another 25 basis points at its November policy meeting, according to CME FedWatch tool.

Lee warned that the downside could continue for the next five to 15 days, until around August 25, around the time of Chip maker Nvidia will report earnings In the second quarter of the year, central bankers will hold the Jackson Hole Symposium, where Powell is expected to deliver remarks on the US economy. The escape is the perfect moment for investors to get into the market before those events, which could lead to a resurgence in the year-to-date rally.

“We see this more as ‘August’ than the start of a bigger road,” Lee said, referring to the fact that stocks typically struggle during this month of the year. “We don’t think the market outlook has changed to the end of the year 2023. In fact, this will ultimately prove to be a great buying opportunity.

Lee is one of the most bullish stock market forecasters on Wall Street, with the S&P 500’s year-end target for the benchmark index set to rise 10%. Meanwhile, other economists warned Stocks may be overpriced At current prices, which increases the odds of an in-store correction to the benchmark.

Read the original article at Business interested

Related Posts

Pat Sajak discusses his health problems. He believed he was going to die from the pain

“Wheel of Fortune” host Pat Sajak, in his first post-surgery interview, shared the harrowing experience of his blocked bowel emergency a month ago. Severe pain during a morning walk led…

Read more

Mom With Over 800 Tattoos Called A Freak – Struggles To Secure Job As Businesses Won’t Hire Her

A mother’s two adoring children continue to look up to her as a role model despite the fact that her peers have called her a “freak.” There are no innate…

Read more

Pregnant Wife Sees Best Friend’s Message on Husband’s Phone: ‘You Haven’t Told Her about Us?’

In a Reddit saga, an anonymous user confronted the painful revelation of her husband’s infidelity with her best friend while she was six months pregnant. The woman, facing the challenges…

Read more

A woman is waiting for a train to return home

Presenting millions of photos is not necessary. On the train platform, Ylva Johansson, the Swedish Labor Minister, was observed consuming food. The politician is shown as an ordinary woman rather…

Read more

Why Is It Important To Store Toilet Paper In The Refrigerator? A Little-Known Secret

The battle against unpleasant odors in the kitchen takes an unconventional turn with the use of toilet paper stored in the refrigerator. Opening the fridge often reveals stubborn, musty smells…

Read more

SEVEN (7) THINGS THAT CLOG YOUR PORES AND CAUSE ACNE

We’ve all got these tiny openings in our skin for releasing sweat and oil, We’ve all got these tiny openings in our skin for releasing sweat and oil, but for…

Read more

Leave a Reply

Your email address will not be published. Required fields are marked *