S&P 500 is most likely going to correct back to 4,100, Mizuho warns market bulls

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The Federal Reserve is still chasing 'an elusive soft landing' for the economy despite having lifted rates to a 5%-5.25% range, which isn't a bullish sign...

It isn’t a bullish sign for the stock market that the Federal Reserve is still chasing “an elusive soft landing” for the economy more than a year into its battle against high inflation, according to economists to Mizuho Securities.

But... It isn’t a bullish sign for the stock market that the Federal Reserve is still chasing “an elusive soft landing” for the economy more than a year into its battle against high inflation, according to economists to Mizuho Securities. But with the Fed still penciling in two more potential rate hikes for 2023, as elements of inflation remain “sticky,” or tough to cool, the Mizuho team thinks the result will be more damage on the economy than investors currently expect, while the central bank works to bring the cost of living back down it 2% yearly target.

They pointed to forward expectations of 12% earnings growth in 2024, after a “disappointing” 1%-2% advance this year, suggesting “the market is discounting that the worst of the economic slowdown has already transpired.”

 

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