Stocks are near a bull market but downside risks loom, says Barclays

The benchmark for the largest stocks in the US is knocking on the door of a bull market, hoisted from lows in part by investors optimistic about prospects for the economy. But Barclays says the case for a sustainable new bear market is a stretch for now.has crept up nearly 18% since hitting a low of 3,491.58 in October when investors shoved the index further into a bear market, shaken largely by the Federal Reserve's rapid rate hikes.

"However, we think we still have a ways to go before seeing the trough," he continued."Valuations can remain irrational for a time but earnings cannot, and if the history of recessionary bear markets is a guide, both sides of the P/E multiple remain exposed to asymmetric downside risks." But Barclays sees valuations as"too optimistic" relative to its base case for a shallow recession and $200 in per-share earnings collectively for S&P 500 companies in 2023.

Investors are looking through an earnings contraction this year to an implied rebound in 2024 and positioning is making it"far more punitive" to be late than early. Mutual funds and hedge funds, for example, were caught sharply underweight the tech sector ahead of the recent flight-to-quality moves.

Business Business Latest News, Business Business Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Stock market analysis: 20 stocks make up nearly all S&P 500 gains this yearJust 20 stocks on the S&P 500 are responsible for nearly all its gains this year as Big Tech leads rally
Source: BusinessInsider - 🏆 729. / 51 Read more »

Stock Market Today: What to WatchStock futures were little changed after Friday's jobs report. Follow the latest markets updates. Could be because the markets were closed Friday.
Source: WSJ - 🏆 98. / 63 Read more »

Auto, realty stocks help Indian shares ahead of Q4 earningsIndian shares settled marginally higher on Monday, helped by strong quarterly business updates from auto and realty companies, but rising odds of a U.S. Federal Reserve rate hike in May capped gains.
Source: Reuters - 🏆 2. / 97 Read more »

Stocks making the biggest moves premarket: Micron, Pioneer Natural Resources, Tesla and moreThese are the stocks posting the largest moves before the bell.
Source: CNBC - 🏆 12. / 72 Read more »

U.S. stocks fall at the open after three-day holiday weekendU.S. stocks opened down Monday following the three-day holiday weekend, with investors resuming trade after U.S. stock exchanges closed for Good Friday. The Dow Jones Industrial Average fell 0.3% soon after the opening bell:
Source: MarketWatch - 🏆 3. / 97 Read more »