June 14, 2023
Weekly Market Outlook
By Donn Goodman and Keith Schneider
The good news, as you can tell from the headline above, is that the S&P 500 entered a NEW BULL Market from the October 2022 lows.
The End of the Bear Market:
Besides a 20% rise from the lows, there are signs that we are likely at the end of the “bear” market. We have posted a number of charts supporting this over the past few weeks. We have also shared positive prognostications from people like Ryan Detrick (of the Carson Group), that provide statistical evidence of what happens when returns have produced positive returns at certain points beginning and continuing through the first half of the year.
Please review our previous Market Outlooks to revisit these forecasts. Many of these charts, like the one below, show what might occur after the 20% rise from the previous market bottom.
PLEASE pay attention to the periods above including 1974 (stagflation) and 2002 (reemergence of the bear) when technology stocks continued their decline from 2000-2002. These two periods resemble in some fashion, the dynamics playing out in the current market environment.
Managing Director of Banc of America Savita Subramanian (Barron’s top 100 most influential women in Finance) states, “after crossing the +20% mark from the bottom, the S&P 500 continued to rise over the next 12 months 92% of the time (vs. 9% average overall) based on data going back to the 1950’s.”
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I loved the below cartoon I came upon this weekend. It sums up what the 20% off the bottom means, the enthusiasm for AI driving the market’s exuberance as well as the expectation that all the problems of the economy are now going to somehow disappear NOT.
Is This “Bull” Market Only Based on Enthusiasm?
There are several bullish technical factors that have improved over the last several weeks that support the market’s strength.
Click here to continue reading the weekly MarketGauge Market Outlook.
