A growing number of Wall Street strategists see last week’s stock market rebound as a head fake before more selling, as risks to the US economy and corporate earnings growth remain with stubbornly high inflation.
The recent bounce was driven by oversold conditions tied to hopes that that the Federal Reserve may be debating a pause in September, Morgan Stanley’s Michael Wilson, , told clients in a note. He thinks earnings estimates remain too high and sees the S&P 500 trading close to 3,400 by the end of the second-quarter earnings season in mid-August, implying 18% downside from Friday’s close.
Jonathan Krinsky, chief market technician at BTIG, also thinks the S&P 500 will decline to 3,400 to 3,500, but told clients in a note that it’s “probably a late summer or early fall event,” and before that the equities benchmark will bounce between 3,800 and 4,250.
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https://www.bnnbloomberg.ca/wall-street-thinks-any-stock-market-rally-will-be-short-lived-1.1772848
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