Its Over, page-13141

...you see now this has reached mainstream, it could well be a self-fulfilling prophecy.

...not everyone will believe it though, some will stick to their "my commodity price is still strong" viewpoint until it does not. And as usual, the majority will be behind the curve.

...Wall St seems to want to see and hope with glass half full view that as long as the market has imputed the number of rate hikes the Fed will do, it can begin to move on and go higher...but like I said, we haven't seen yet what the Feds action will do to corporate earnings and perhaps even the credit markets and until we know the score, we are likely to see lower highs and lower lows with numerous short bear rallies along the way. But those bear rallies do not lift all boats...e,g we saw how Meta (FB) lost 4% overnight despite a strong market rebound. And small and micro caps that have already been decimated could still face more selling with liquidity drying up (few buyers at much lower prices).
S&P 500 could drop to 3000: Morgan Stanley’s Wilson

Timothy Moore

Morgan Stanley’s Mike Wilson remains as bearish as ever, proving to have been one of the most accurate Wall Street equity strategists so far this year. He still forecasts more clouds in the future.

Although “markets are more fairly priced”, Wilson said in a note, the S&P 500 is not yet pricing “the risk of a recession, in our view, which is 15 to 20 per cent lower, or roughly 3000. The bear market will not be over until recession arrives or the risk of one is extinguished.”

The S&P 500 rallied 2.5 per cent to 3764.79 on Tuesday (Wednesday AEST).

Wilson said Morgan Stanley had further lowered its price to earnings targets because the yield on the 10-year US government note had risen higher than it expected. The yield ended up 5 basis points to 3.27 per cent overnight.

“For us, the end game remains the same; we see a pretty poor risk reward over the next three to six months with recession risk rising in the face of very stubborn inflation readings. Valuations are closer to fair at this point, but hardly a bargain if earnings are likely to come down and/or a recession is coming.

“We recognise a lot of pain has already been inflicted during this bear market. Nevertheless, we can’t yet get bullish for more than just a bear market trade until we reach the 200-week moving average of 3500. Even then, we would only expect an oversold bounce until recession risk falls materially.”