Boomers are leaving the stock market. Here's what comes next, says this strategist.

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“Between satiated pent-up demand and falling equity valuations, consumer durable spending takes a hit,” TS Lombard’s chief U.S. economist Steven Blitz said.

A powerful, tech-led stock surge may be on the cards for Thursday, with Facebook parent Meta Platforms in the driver’s seat after less disastrous than feared results.

As Blitz explained, if equity market weakness continues, with the S&P 500 SPX, +1.08% down 12% year to date, consumers may slash spending by the end of this year, if not sooner. His below chart shows how equities now, mostly, comprise a bigger chunk of household worth vs. early 2000. And as households sold into a late-90s rally instead of buying into the one that started in 2009, they are stuck with a higher cost-basis compared with the 2000 market crash. In short, they are more vulnerable to equity pullbacks.

The big question is how far will the Fed be willing to go to undermine confidence in its put — that is, market and investor belief that the central bank will step in to halt a slide in stocks.

 

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the FED wanted to cool demand, so they got it

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