Stocks traded off session lows after data showing a drop in inflation expectations tempered concern about disappointing outlooks from big banks.
(Bloomberg) — Stocks traded off session lows after data showing a drop in inflation expectations tempered concern about disappointing outlooks from big banks.
Over the next few weeks, traders will get a sense on how resilient profit margins will prove to be in the face of aggressive Federal Reserve policy to knock down inflation. JPMorgan’s boss Jamie Dimon said that while the economy remains strong “we still do not know the ultimate effect of the headwinds coming.”
S&P 500 earnings revisions are pointing to “a hard landing” even though the market is pricing in a soft landing, Goldman Sachs Group Inc. strategists led by David Kostin wrote. If there is no recession, as the team expects, S&P 500 earnings per share growth will be flat this year, they said.
US stocks are poised for a fresh slide before ultimately rallying in the second half of the year when economic conditions stabilize, according to BofA strategists.
Investors are positioned for the S&P 500 to tumble nearly 10% to 3,600 points before rallying 17% to the 4,200 level, strategists led by Michael Hartnett wrote in a note.
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