said that the picture for earnings and the economy is starting to worsen.
"Although this bear market has mostly been about inflation, the Fed's reaction to it and higher interest rates, the depth and length of most bear markets are determined by the trend in forward earnings. On that score, NTM EPS estimates have started to flatten out which has provided some investor optimism," Wilson wrote in a February 27 note.
The below chart shows how over the last few years, in the final month of a quarter, stocks have reflected coming downward earnings revisions.Wilson has also pointed out in recent notes that stocks remain historically overvalued relative to where bond yields are. He expects the S&P 500 to fall to a low between 3,000-3,300, before recovering to 3,900 by the end of 2023. A drop to 3,000 represents a further 22% downside from current levels.
"1 year ago Fed funds was 0%...since then 290 global rate hikes …not a prelude to 'Goldilocks', prelude to hard landing & credit events; bad 'crashy vibes of March' set to worsen absent a soft Feb payroll number," Hartnett wrote in a note on Friday.The February payrolls report was indeed strong, with the Bureau of Labor Statistics announcing on Friday that the US economy addedlast month, well above expectations of 225,000 jobs.
But Yellen says it’s all bc of climate change. 👉🤡
Stop raising rates!