Have the bears had their last roar, or is the market poised for more pain?
Stock market news this week has provided some interesting opinions on where the market is headed. After three straight days of gains, with the S&P back over 2800 and at its highest level in 2019, some analysts are saying the worst is over. While other analysts are warning investors that earnings this year are expected to fall, and that the market is priced for a “Goldilocks” scenario of continued growth with no inflation.
One indicator that things aren’t what they seem to be, is that the Jobs report for February came in at 20,000 new jobs, when the number was expected to be between 180,000 to 200,000. Global growth is seen as slowing across the board, and the outlook for the US economy is also sluggish. Additional economic data coming this week are Jobless Claims on Thursday and Consumer Sentiment on Friday, which will make the case for a more positive or more negative outlook for the economy, depending on the data.
An interesting graph to review is the 1-year chart of the S&P 500 index, which clearly shows a 52-week peak above 2,900 in September 2018, and a 52-week low below 2,400 in December 2018. What may be more interesting to note, is how the rebound from December perfectly resembles the arc of a ball bouncing off the (imaginary) floor of 2,400 and peaking at 2,800 yesterday. Will the S&P index arc now continue that parabola and fall again to the floor of 2,400 or lower?