{"id":20348,"date":"2023-06-19T15:10:43","date_gmt":"2023-06-19T15:10:43","guid":{"rendered":"https:\/\/www.thinkadvisor.com\/2023\/06\/19\/wall-street-rally-wipes-away-year-of-losses\/"},"modified":"2023-06-19T15:10:43","modified_gmt":"2023-06-19T15:10:43","slug":"wall-street-rally-wipes-away-year-of-losses","status":"publish","type":"post","link":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/2023\/06\/19\/wall-street-rally-wipes-away-year-of-losses\/","title":{"rendered":"Wall Street Rally Wipes Away Year of Losses"},"content":{"rendered":"
<\/a><\/div>\n

The dollar\u2019s strength, powered by rates, has also withered with the Bloomberg Dollar Spot Index trading near levels seen in April 2022, down nearly 10% since its record high.<\/p>\n

The S&P 500 index posted its mildest reaction on FOMC day in two years. Though it was the first in 11 meetings where policymakers held rates, they also lifted forecasts for higher borrowing costs of 5.6% in 2023, implying two additional quarter-point rate hikes or one half-point increase before the end of the year.<\/p>\n

Contrast that with markets that hung on every word Fed officials said in the last year.<\/p>\n

\"Bloomberg<\/figure>\n

The bull market also flies in the face of 65% odds of a US recession within a year, by economists\u2019 reckoning. The collapse of four regional banks and inversions all along the US Treasury curve back the case for an economic downturn.<\/p>\n

Wall Street veteran Bob Michele anticipates a recession by the end of the year that will force a Fed pivot to easy policy.<\/p>\n

For now, the American economy seems to have sustained the assault of rate hikes with resilient labor markets and mostly healthy corporate balance sheets.<\/p>\n

Among the market\u2019s biggest bears, Bank of America strategists upgraded their target for U.S. stocks and grew more optimistic on the economic outlook, forecasting a \u201clater and more moderate downturn.\u201d<\/p>\n

But Peter Chatwell, for one, isn\u2019t convinced the economy or markets can resist the pull of tighter policy for long. \u201cThe rally is typical of a bear market rally, rather than an outright bull market rally,\u201d cautioned the head of global macro strategies trading at Mizuho International Plc. The run-up in prices is \u201con a weak foundation, vulnerable to a repricing to higher medium term interest rates.\u201d<\/p>\n

Whether or not the bull market is real, it\u2019s attracting investors. In the last three weeks, global US equity inflows amounted to $38 billion, the strongest momentum of flows to the asset class since October, according to Bank of America, citing EPFR Global.<\/p>\n

\u201cInvestors appear to have finally thrown the towel and start chasing the rally,\u201d said Emmanuel Cau, head of European equity strategy at Barclays. \u201cSo long as U.S. recession keeps being pushed back, we think equities can continue to grind higher.\u201d<\/p>\n

(Image: Rawpixel.com\/Adobe Stock)<\/em><\/p>\n

Copyright 2023 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.<\/p>\n","protected":false},"excerpt":{"rendered":"

The dollar\u2019s strength, powered by rates, has also withered with the Bloomberg Dollar Spot Index trading near levels seen in April 2022, down nearly 10% since its record high. The S&P 500 index posted...<\/p>\n","protected":false},"author":1,"featured_media":20349,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[1],"jetpack_featured_media_url":"https:\/\/blog.lifeinsurance-orleans.ca\/wp-content\/uploads\/2023\/06\/wall-street-rally-wipes-away-year-of-losses.jpg","_links":{"self":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/20348"}],"collection":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/comments?post=20348"}],"version-history":[{"count":0,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/20348\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/media\/20349"}],"wp:attachment":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/media?parent=20348"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/categories?post=20348"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/tags?post=20348"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}