Jurrien Timmer, global macro director at Fidelity Investments, believes that the S&P 500 market is in a good position for a recovery. The S&P 500 has dropped about 20% since its high point this year.
Timmer claims that in a recent thread posted on social media platform X he has seen the S&P 500 swinging between a trendline rising and falling as early as December 2011.
Analysts say that the recent correction has pushed the stock market below its rising trendline and now it’s at a stage where it might make a recovery.
If the S&P 500 index were to surpass that point of breakdown, this would only happen once the index had fully swing from one extreme into the other.
Below is a chart showing the rising trendline of the index (exponential regression). The market moves from side to side like a pendulum. In this instance, it moved from above to below the trendline. This suggests investors have already priced in the pain of taking on the opposite side .”
Timmer warns, however, that the S&P 500 may have reached the end of its long-term upward trend that began in 2009. Timmer believes that investors will reassess the US stock markets in light of a new global order.
Timmer thinks that investors are now looking at undervalued and fundamentally strong stocks even if they’re outside the US market.
There is no way to avoid the questioning of the bullish, secular regime that we’ve been in since 2009 when the financial crisis ended. It is the timing of this cyclical decline that raises concerns about the health of the secular bull. In my opinion, it’s in its last years. A new order based on de-dollarization and deglobalization could be in the works, which could have a profound impact for many years.
It is also a question of leadership in the market. The Mag 7 dominant position is now over 10 years old, and is fraying. A rotation towards value and international will likely happen within a reduced secular beta regime.”
S&P 500 was trading at 5282 points as of the Friday close.
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This article Fidelity’s Global Macro analyst predicts S&P recovery after pricing in “enough pain” – but there’s a big catch appeared first on the ICD.
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