Don’t get too bullish yet
NYPD Emergency Service Unit officers negotiate with a man who climbed the Charging Bull sculpture in the Financial District, Manhattan, New York City on Sunday, April 16, 2023.
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The bears have gone into hibernation and the bulls are charging in. Or so they say.
The S&P 500 inched up 0.11%, the Dow Jones Industrial Average added 0.13% and the Nasdaq Composite climbed 0.16%. Those don't sound like impressive numbers (though any gain should be celebrated), but when viewed against a longer timeframe, they reveal a striking upward trend.
Friday's gain gave the Nasdaq its seventh consecutive winning week, a feat not seen since November 2019. The tech-heavy index was juiced by Tesla's 4% jump — its 11th straight positive day — after General Motors announced it would use the electric vehicle company's charging network.
The S&P had four straight weeks of gains, but more significantly, it's up 20% from its October low. Bank of America technical strategist Stephen Suttmeier even thinks the S&P could shoot up to 5,000 by June next year.
Not everyone's convinced, though. JPMorgan's Michele, who oversees more than $700 billion in assets for the bank, said markets today "remind me an awful lot of that March-to-June period in 2008," when problems in banks and real estate were "largely dismissed" by traders.
Michele's "highly confident that we're going to be in recession a year from now." Indeed, things aren't looking rosy for the corporate world. Financial data company FactSet expects second-quarter corporate earnings for the S&P to decline 6.4% year over year, based on the pessimistic expectations companies have issued. And a recession would, of course, mean bad times for markets.
"Everything we own in our portfolios, we're stressing for a couple quarters of -3% to -5% real GDP," Michele said.
In sum: Despite calls that we're in a new bull market, it's not so certain, especially since the S&P is still more than 10% off its all-time high. Keep an eye out for the U.S. consumer price index and the Federal Open Market Committee meeting this week for clearer signs on whether the S&P is really on track to welcome the bulls.
Source: CNBC
