Jump to content

S&P 500 Forecast Ahead: Worst H1 Return Since 1970


Recommended Posts

S&P 500, US BOND YIELDS ANALYSIS AND TALKING POINTS

  • S&P 500 Posts Worst H1 Return Since 1970, Will H2 Be Any Better?
  • Markets Transitioning From Inflation Scare to Recession Risks, Good News For Bonds

S&P 500 ends below 4,000 for 1st time since March 2021; growth shares lead  decline

The S&P 500 has posted its worst H1 return since 1970. For many investors, they will be glad to see the back of H1. The question now is whether H2 will be any better?. However, unless you are nostradamus, it is a known unknown how equity markets will perform in the next six months. What we can do is take a look at the top 10 worst H1 performances for stocks, which 2022 now slots into at number four (Figure 1.), and see how equities performed in H2. Of course, I am aware that past performance does not equal future results, but, we can take lessons from the past and use it as a loose guide.

Figure 1. Top Worst H1 Performances in the S&P 500 Since 1928

S&P 500 Forecast Ahead: Worst H1 Return Since 1970

Source: Refinitiv, DailyFX

As shown in the table above, the S&P 500 has generally had a modest bounce back in Q3, averaging 7.7%, following an average H1 drawdown of over 20%. From current levels a 7% rise in the index takes us back just above 4000. Now while this is not an unreasonable target, it is important to note that this does not change my current bias, which remains to fade rallies. This bias will remain until the Fed pivots away from its aggressively hawkish stance, and while we have seen some encouraging inflation data with Core PCE edging lower again, alongside the continued softness in commodities. For now, the Fed remains laser focused on headline CPI, which remains the most important monthly economic data.

Elsewhere, we do appear to be transitioning from one regime of inflation scare to another regime of rising recession risks, which in turn is starting to see bonds finally work as an equity drawdown hedge. In turn, this makes the outlook for bonds more attractive, particularly now that we are seeing market based inflation expectations drift lower. Looking ahead, eyes will be on the ISM Manufacturing PMI survey as market participants attempt to gauge the extent of the current slowdown in activity.

Jul 1, 2022 | DailyFX
Justin McQueen, Strategist

Link to comment

S&P 500 and Nasdaq 100 Bludgeoned in the Second Quarter. Will This Trend Persist?

Jun 30, 2022 | DailyFX
Diego Colman, Market Analyst

US STOCKS OUTLOOK:

  • S&P 500 drops 16.4% during the second quarter, heads to the third quarter in bear market territory
  • The Nasdaq 100, for its part, sinks 22.5% amid broad-based tech sector weakness
  • The macroeconomic environment will likely become more challenging for stocks in the near-term, preventing a meaningful and sustainable recovery

Outlook on major indices amid potential change in price trends | IG EN

Today marked the end of the second quarter and the first half of the year. Both periods were disastrous for U.S. stocks on the back of extremely bearish sentiment and growing headwinds for the economy, including soaring inflationary pressures, rapidly slowing growth and higher borrowing costs for consumers and businesses.

When it was all said and done and after dizzying price swings, the S&P 500 plunged 16.4% in the second quarter, erasing more than $6 trillion in market capitalization. The Nasdaq 100, for its part, led the sell-off on Wall Street, plummeting 22.5% amid broad-based tech sector weakness. The following table summarizes the performance of the main U.S. equity indices.

stock market performance

Source: DailyFX and Bloomberg

The brutal rout came as the Federal Reserve launched one of its most aggressive hiking campaigns in recent times to tame inflation, now sitting at the highest level in more than four-decades. The forceful actions by policymakers, who waited too long to begin removing accommodation and then had to front-load interest rate increases, have tightened financial conditions considerably, fueling fears that the U.S. economy is headed for a hard landing. It is difficult to say with certainty whether the worst predictions will materialize, but the downturn narrative is growing stronger by the day.

Link to comment

DAX, DOW and FTSE Fall as the Quarter Looks Set to End in Turmoil

Jun 30, 2022 
Zain Vawda

  • DAX 40:Sinks as Recession Fears Continue to Mount.
  • FTSE 100: Declines as UK Business Confidence Hits 15-Month Low.
  • DOW JONES: Falls as Growth Concerns Weigh Heavily.

Full article on DailyFX

DailyFX and IG.jpg

Link to comment

If we could get some news about negotations and a possible ceasefire in Ukraine then i would say this is the bottom

https://edition.cnn.com/markets/fear-and-greed

"That indicator previously fell to 0 in August 2002, July 2008, September 2011, September 2015, January 2016 and March 2020, observed Hartnett. When it has previously zeroed out, except in the case of a double-dip recession such as 2002 or in the event of systemic events, as in 2008 and 2011, three-month returns have been strong, as the table below shows."

https://www.marketwatch.com/story/based-on-history-the-next-bull-market-is-just-months-away-and-could-take-the-s-p-500-to-6000-says-bofa-11655475414

Edited by Kodiak
  • Thanks 1
Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
      21,259
    • Total Posts
      90,868
    • Total Members
      41,364
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    meka
    Joined 05/02/23 08:51
  • Posts

    • Q: How can I experience the Fairy Cat metaverse? A: Debuting in January 2023, Fairy Cat is one of the most popular crypto metaverse games. While earlier games (World of Warcraft, League of Legends, Destiny 2) either precede blockchain technology or have not integrated it into their games at all, more recent metaverse iterations - such as FairyCat - integrate metaverse games and blockchain platforms. These so-called "crypto metaverse" games use blockchain technology to achieve encrypted in-game cash, play-to-earn (P2E) and non-fungible tokens (NFT), decentralization and other functionality to bring extraordinary benefits to metaverse games. relevant impact. You don't need to be a crypto expert to play this innovative game, although a little crypto knowledge is helpful to take advantage of all the functionality of FairyCat. Start exploring Fairy Cat: 1. Go to the Fairy Cat website to learn more about the game's currency models, then download the Metamask wallet. 2. Start earning money by opening the game in the Metamask wallet browser. At this point, the game will connect to your wallet account. Don't worry that this game will steal your wallet balance, because it doesn't need your account authorization data, it just needs your wallet data. 3. Once you are in Fairy Cat, you can go through a money transfer tutorial to learn the basic controls. Then you can earn money in the following three methods: Method 1: Adopt a cat to help you find treasures, and you can make profit after selling the treasures. Method 2: Synthesize an LV1 elf cat through 5 elves, and then sell the LV1 elf cat to earn money. This can be understood simply as using 5U to earn 10U (50% probability), and you can buy items to increase the synthesis rate. Method 3: Invite your friends to play the game. After your friends earn money, you can also get commission income. The income is very high.
    • HI,  Please if any IG supporting staff can answer the questions below? 1. in the upcoming AMC/APE vote on 14 March 2023, can shareholder that hold AMC and APE at IG able to make a vote? I also have AMC and APE at IBKR and they did send out a notification to inform me that I can do proxy vote. Will IG do the same? 2. the upcoming vote is to determine APE covert back to AMC then do reverse spilt. Last year after APE issued, IG staff told me that they have to move APE to share dealing account from my ISA account as ISA is not eligible to hold APE (which is completely unbelivable, my APE at AJ Bell and HL are still sitting in ISA account). Anyway, if the conversion and reverse spilt is going to happen, will IG move my APE back to ISA account for the corporate action? Many Thanks
    • The epidemic in recent years has produced profound changes in people's lifestyles, and many of their activities have started to be developed in the virtual world, which plays an important role in promoting the development of the universe of meta. Games, as an important part of the universe of meta, will be the first industry to gain the benefits , but the following conditions are still indispensable for blockchain games to achieve better development.   - Wallets and Exchanges. Through the use of wallets, game users can truly take control of the assets in the game, and exchanges provide a trading platform and liquidity for these game assets NFT, helping users trade and revitalize their game assets. Wallets are a key application for depositing blockchain assets. Currently, wallets such as Metamask are not enough to support the extensive adoption of block games, and wallets will further advance community drive the popularity of blockchain games.  - Game playability. The biggest difference between blockchain games and traditional games is that gamers are also investors. Many blockchain games have gone out of course, treating all users as investors only and forgetting that the essence of making games is to develop high-quality games that users are interested in paying for. If most people play a game just to make money, and no one is ready to pay for it, it becomes a side-scam. The revenue of the participants of the side scam comes from the money of the people who come later, and if there are not enough people who come later, they will not be able to cash in the revenue, leading to the breakdown.  - Speed and performance. A high level of concurrency is the characteristic of game applications, so Wax, Coinan Chain and Polygon, which are public chains with a high level of concurrency and low fees, have attracted a large number of game developers. In the future, with the maturity of technologies such as Ethernet Layer 2 and slice scaling, as well as the maturity of other gaming public chain technologies compatible with EVM, blockchain games will have a better development and operation environment.  - Cross-chain and interaction. Cross-chain and interaction of game assets will be a direction of future development of metaverse games, and blockchain should be connected and accessible like the Internet. The maturity of cross-chain technology in the future will promote the cross-chain transfer of game assets and NFT, and improve the interaction experience of the system                                                                                     The game should maintain the operation of the project by relying on the payment of some users or selling profitable products, just like the new blockchain game Fairy Cat in 2023, which developed diverse gameplay for players and increased the playability of the game, thus got the recognition of many players. Blockchain games need to work hard on game experience and playability. Token economics is essentially just a kind of interest structure , and even good token economics cannot replace the development, operation and profitability of the project itself. It is believed that with the maturity of the above conditions, more and more game developers and investors will enter this industry and together promote the production of some blockchain games with beautiful graphics, first-class experience and high playability.
×
×
  • Create New...