US markets had a meltdown on Tuesday – their worst since June 2020 – following another hot inflation report. But that may not last long, according to Andrew Slimmon of Morgan Stanley Investment Management, who says the S&P 500 could rally later this year. U.S. inflation data released on Tuesday showed consumer prices rose more than expected in August despite a sharp drop in gasoline prices. Markets plunged after the report was released, with the Dow down more than 1,200 points – or nearly 4% – the S&P 500 down about 4% and the Nasdaq down about 5%. “I think July is the highest,” Slimmon told CNBC’s “Street Signs Asia” on Wednesday, referring to the inflation figure. “It’s not going down very quickly, but it’s going down.” Slimmon, managing director and senior portfolio manager, said, “Positioning is evenly down. And I doubt that will change at some point in the boost Q4. [S & P 500] higher at the end of the year, not lower. “He said the August inflation print doesn’t change his view that the S&P 500 will ‘end the year closer to where it started – i.e. at around 4,778. After Tuesday’s decline, only The number closed at 3,932.69. Rising inflation has prompted the US Federal Reserve to quadruple this year for a total of 225 basis points. the market is even pricing in a 100 basis point increase, but Slimmon said such tightening conditions may not last until next year. get a higher price. That won’t last forever,” he said. What went bad? [this year] already the Fed, maybe next year earnings won’t be as good but the Fed will start to slide and maybe that will alleviate some of these tight financial conditions,” added Slimmon. “Slimmon says it’s too late to buy defensive or energy stocks.” We buy fear and sell greed. He said the time to buy energy is late 2020 when the futures curve is negative P 500. Slimmon said the fear right now is in the consumer sector – the University of Michigan’s consumer sentiment index has hit a 46-year low. “We’re adding custom names. Consumer sentiment has hit this low consumer sentiment as the pace of change,” said Mr. Slimmon. He named three stocks the company loves: Home Depot, Fortune Brands Home security products company & Security and the home-building company Lennar Corporation.