Investors are reading the stock market’s breakneck bounce off the March 23 lows all wrong, says one prominent Wall Street analyst.
In One Chart:This stock-market table shows why the S&P 500 outlook depends on what letter of the alphabet the coronavirus recovery looks like Dwyer said he would characterize the market’s “extraordinary move” since the March 23 low and the Federal Reserve’s April 9 announcement of a plan to inject an additional $2.3 trillion into the economy as “economically defensive,” driven by “those megacap growth stocks that benefit from a longer stay and work-from-home economy, or the health care sector involved with the COVID-19 response.”
He isn’t saying investors should fight the Fed. The central bank’s backstop of the corporate and municipal credit market has “likely took the worst-case retest off the table,” he said.