The bear market has three phases; and we’ve only just started our second,” said the veteran analyst.
Stocks will start the Black Friday half-session near 10-week highs, having recovered in part on hopes the Federal Reserve will slow the pace of rate hikes as it waits to see the extent of previous tightening subsides. impact on the economy.
As a result, investors are looking forward to the moment when the Fed will finally pivot and borrowing costs may start to fall again. For now, they are expressing few concerns about how much damage any economic downturn could do to corporate earnings.
Peter Boockvar, chief investment officer of Bleakley Financial Group, thinks it’s all too rosy. In an interview with Magnifi+, an AI trading and investment platform, the veteran analyst warned that stocks will fall next year and that we still haven’t seen the bottom of the bear market still in its infancy. Between.
“Bear markets typically have three phases. The first is that we take a lot of the vanity and euphoria out of the market about the sexy names we’ve seen in 2021 and we lower the PE rate. We did that, we went from 22 times earnings, let’s say 16 to 17,” Boockvar said.
In the second stage, he added, investors begin to calculate the economic and earnings consequences of the company’s continued rise in interest rates…” and then in the third stage, everyone take risks. Nobody wants to own a stock anymore, and that’s your bottom and that’s when you need to buy stocks with your fist.”
“I feel like we’re really just starting the second phase,” he said.
However, there will be opportunities. According to Boockvar, it all depends on your time scale.
“If you have a big purchase that you have to make within the next year or two, whether it’s a kid in college or it’s a wedding, a bar mitzvah or some other expense. like a house that you have saved up to buy, you should not participate in the stock market. It should be in the bank, it should be in the form of a short-term treasury bond. It has to be cash equivalent because the next few years will be challenging for those with short-term vision,” he said.
So what are the properties he is interested in? Bonds are attractive, but it is important to ensure quality.
“You have an investment grade bond that yields 6%, and you can do that without much risk in terms of maturity by buying a shorter term….And you can buy a two-year Treasury note. year and get interest of four and a half percent and get some nice Munis too. So I believe fixed income land, with shorter term, will be more attractive. The longer the trading term, the more skeptical I am,” Boockvar said.
And in stocks? “Value stocks are much more attractive than growth tech stocks. I think commodity stocks are much more attractive than they have been in the last five years. Definitely energy, precious metals, even industrial metals like copper stocks.”
If the dollar has peaked and fell back as the Fed nears the end of its rate hike cycle, then Boockvar prefers the look of overseas markets, especially in Asia, and gold and silver as the central bank kicks in. interest rate cuts.
Finally, one thing he definitely doesn’t care about is former techies. “Just buy Google
GOOGL,
and Amazon
AMZN,
and apple
APL,
while they are all great companies, that ship has sailed and the baton of market leadership will be passed on to other parts of the market,” the analyst said.
market
Stocks are lining up to start the week’s final trading favorably, with S&P 500 futures
ES00,
up 0.2% to 4039 and 10-year Treasury yields
TMUBMUSD10Y,
little change at 3.709%. US crude oil futures fell 0.7% to $79.50 a barrel.
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rumor
This is a half-day of Wall Street trading as many traders also extend the Thanksgiving holiday. Expect very thin volumes.
However, analysts and investors are looking for guidance on how the Black Friday sale will play out. How do US consumers stand up in the face of high inflation and soaring borrowing costs? Shares in Amazon
AMZN,
and Walmart
WMT,
has been relatively stable.
Shares in Tesla
TSLA,
about 2% increase in premarket action despite car company news China recalls about 80,000 cars.
Shares of Activision Blizzard
ATVI,
is down more than 3% following a report late Wednesday that Federal Trade Commission may block Microsoft’s purchase of video game maker.
Fed’s Bullard is set to talk inflation, interest rates in a MarketWatch Q&A session on Monday. Sign up here to watch the show and ask questions.
central bank of china loosen monetary policy as the country grapples with further COVID-19 outbreaks.
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chart
Here’s an interesting observation on stock volatility from Benedek Vörös, director of Index Strategy at S&P Dow Jones Indices.
Vörös wrote in his latest newsletter: “It has been a tumultuous year, but the US stock market has returned to a relatively calm level over the past few weeks and options market participants look even more comfortable than their cash traders.” “The VIX, which has averaged volatility 3 points above the S&P 500 volatility determined over the past 21 days over the past year, has fallen 6 percentage points below this level as of yesterday’s close. Historically, that has had some predictive power for lower volatility to come.”
Source: S&P Dow Jones Index
top stocks
These are the most active stock market stocks on MarketWatch as of 6 a.m. ET.
|
share |
security name |
|
TSLA, |
Tesla |
|
GME, |
game stop |
|
AMC, |
Entertainment AMC |
|
NIO, |
NIO |
|
COSM, |
Space organization |
|
APL, |
Apple |
|
ape, |
Prioritize entertainment AMC |
|
BBBY, |
Outdoor shower bed |
|
AMZN, |
amazon.com |
|
MULN, |
Mullen car |
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