Your Evening Recap for Monday, April 22nd
Equity markets rebounded on Monday to snap a 6-day losing streak. The rebound may extend into mid-week but is likely short-lived due to the expected economic data. The PCE price index is due on Friday and is unlikely to allow the FOMC to cut rates soon. The risk is that inflation will persist at current levels or accelerate, leading the FOMC to keep the base interest rate at its present levels through year’s end. The S&P 500 advanced more than 1.0% at the session’s high.
With May fast approaching, the question becomes whether this is a good year to sell in May and go away. Because the reality of inflation, interest rate cuts, and earnings growth does not align with the expectations at the start of the year, it is likely a good year to sit out the summer and wait until fall to reposition or add new money. The market may not sell off further, but there is little reason to think new highs will be sustained if reached or that volatility will subside.
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