Pro: the S&P 500 index could return to its pre-pandemic levels | Invezz
Invezz is an independent platform with the goal of helping users achieve financial freedom. In order to fund our work, we partner with advertisers who compensate us for users that Invezz refers to their services. While our reviews and assessments of each product on the site are independent and unbiased, brands may pay to appear higher up our table rankings or place ads in specific areas of the site. The order in which products and services appear on Invezz does not represent an endorsement from us, and please be aware that there may be other platforms available to you than the products and services that appear on our website. Read more about how we make money >
Jun 23, 2022
She expects tech to remain under pressure in the balance of 2022.
The benchmark index is currently down more than 20% for the year.
A 30% decline in the S&P 500 index from its peak remains a possibility, says Seema Shah. She’s a Senior Investment Strategist at Principal Global Investors.
Shah sees more pain ahead
Shah has reasons to believe the U.S. equities have further downside from here. The earnings estimates, for one, are yet to come down. This morning on CNBC’s “Worldwide Exchange”, she said:
Are you looking for fast-news, hot-tips and market analysis?
Sign-up for the Invezz newsletter, today.
A lot of these declines have taken place without any drop in the earnings growth numbers. So, this is your first leg so far. As we start to see economic and earnings growth data start to turn, that’s when you get into your second leg of equity market declines.
A 30% decline, as she forecasts, would bring the benchmark index all the way back to its pre-pandemic levels.
Tech stocks to remain challenged
Shah cited macro headwinds, particularly the rising interest rate as she warned the tech stocks will likely remain under pressure in the balance of 2022. Energy, she added, will continue to outperform.
Energy has been the key upper driver and we don’t see that changing anytime soon. There will be challenges as regulations or tax holidays but energy market and commodities are probably on an upward push because of structural shortages within that industry.
Testifying to the U.S. Congress on Wednesday, Jerome Powell – Chairman of the Federal Reserve said the central bank intends to move “expeditiously” towards higher rates to depress inflationary pressures.
75.26% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Stocks & Shares