This year, the S&P 500 is down more than 21%. But it also saw several weeks in which stocks rose more than 5% despite slowing economic growth expectations. According to Madison Faller, global investment analyst at JP Morgan Private Bank, such bear market rallies were well suited for investors to sell stocks before a more significant drop in the market occurred. “A lot of the bounces we’ve seen over the past week or so have been primarily technically driven,” Faller said, referring to stock trading based on patterns on the chart rather than corporate financial analysis. For example, the SPY ETF, which tracks the index of large US companies, has risen more than 5% in a week four times this year and twice more than 7%, according to data from Koyfin. “I would definitely use that exposure to get rid of my portfolio risk,” Faller said. “I don’t think they have a really strong base foothold at the moment.” Why sell stock? The strategist, who advises clients at the investment bank, said that although the financial system had not shown “widespread cracks” so far, she was concerned about further tightening of monetary policy, which is running on the economy of late. “We expect an economic recession by the middle of 2023,” she said, adding that JPMorgan Private Bank expects a “mild to moderate” recession. “If we see the S&P 500 drop to 3500 [points]This is when a milder recession is likely to be ruled out. “The index is currently sitting at around 3,750 points. Last week, Bank of America also advised clients not to trust the recent market rally as its research pointed to further declines in the stock market and Dan Niles, a hedge fund manager, also confirmed his belief that the S&P 500 It will fall at 3,000 points. However, he said stocks will rise this month until October 25, when equity analysts lower their estimates after the big tech companies. Third quarter results report. “I think we need to see more earnings cuts pay off before we have Already a very permanent bottom in the stock markets,” said Faller, echoing other major market participants. What are you buying? Faller said she sees one of the “best opportunities” to buy high-quality investment grade bonds. The 10-year Treasury yield has reached Friday’s 14-year high, sending corporate bond yields higher even more.Bond prices move ely repercussions to yield.Faller believes companies with good credit ratings are unlikely to default in the economic environment. The current debt is currently undervalued. On Wednesday, BlackRock advised its clients to jump at a “short-term” opportunity in the fixed income market. The world’s largest asset manager said that while the market was experiencing “maximum price pessimism,” it was seeing value in some short-term bond funds such as the iShares Short Treasury Bond ETF: made up of bonds maturing in less than a year. iShares 0-5 Year TIPS Bond ETF: This is a short-term exposure to US Treasury Inflation Protected (TIPS) bonds. iShares 1-5 Year Investment Bond Corporate Bond Corporation: Offers US corporate bonds with maturities ranging from one to five years.
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