Stocks Bottoming Signals Perfect Buying Opportunity Ahead
- The best opportunity for investors to purchase the dip in stocks is nearing, as per Mark Newton of Fundstrat.
- The S&P 500 will fall to 4,200 before it recovers, Newton further told on CNBC this Tuesday.
- This is mainly because the Fed is possibly done hiking its rate of interest.
Stocks are going through the process of bottoming out, which means the best opportunity for buying may come soon for the investors, according to the global head of technical strategy of Fundstrat, Mark Newton.
In an interview on Tuesday with CNBC, Newton put out his prediction that the S&P might continue to drop to 4,200, which represents a 4% drop from the current level of the index. This will be partly exciting because of the short-term volatility of the market.
However, this downfall is most likely to continue, which proposes that a recovery in the stock prices is not anywhere far.
“History has shown us that during times of military conflict, that market volatility has historically been pretty short-lived,”
Newton mentioned while adding that the long-term technical outlook for the markets did not meaningfully deteriorate due to the war that broke out in Israel.
“We think that pessimism combined with seasonal tailwinds heading into Q4 make us pretty optimistic that we’re in a bottoming process and it should be a good time for risk assets,”
he further added.
Markets have also been immensely expecting the Fed to be over its rate hikes, which means the rates are likely to peak pretty soon before they pull back. Lower rates may power economic growth, he added, which maybe a boon for sectors like tech.
“And though investors remain concerned over high inflation and potential recession, much of the inflationary pressure still lingering in the economy ought to figure itself out on its own,”
Newton added.
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