The"buy the dip" investment strategy that was shellacked in 2022 is poised for a big comeback this year, according to a Wednesday note fromThat's as long as the Federal Reserve doesn't move its own goal posts on inflation and interest rates. The Fed is expected to hike interest rates by 25 basis points at its FOMC meeting Wednesday.
"Equity markets starting to play a different game, focused on easing financial conditions," Lee said. As long as financial conditions ease to a level the Fed can tolerate, buying the ongoing declines in stocks should prove fruitful this year, according to the note. "Wage pressures also tanking evidenced by the 4Q22 employment cost index coming in at 1%, down from 1.4% [in] 2Q22 and within 'spitting distance' of 0.9% needed to achieve 2% overall inflation," Lee said.
Will this be a pump-and-dump event, where investment firms jack up the stock market just long enough to liquidate to recover losses due to the ongoing recession? Or do they need money for next year's election funds? Either way, don't get too excited!
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