The S&P 500 index tanked roughly 10% in March – its worst monthly decline in two years. Still Chris Verrone says things are unlikely to get any better for the U.S. equities in the coming months.
Verrone’s remarks on CNBC’s ‘Squawk Box’
According to the head of technical analysis at Strategas, the benchmark index could test its pre-pandemic 3,500 level later this year. This morning on CNBC’s “Squawk Box”, he said:
A lot of the high-profile stocks like Facebook, Amazon, JPMorgan, BlackRock have returned nearly back to where they were before the big COVID ramp. So, I have to ask the question does the S&P 500 have to give back its big COVID ramp.
The U.S. CPI hit 8.50% in March, further adding to the evidence that the central bank will have to be aggressive in taming inflation this year. That continues to be a major headwind for the stock market.
Stocks could take another five months to bottom
2022 is the year of U.S. mid-term elections, which, as per Verrone, offers significant insight into what to expect from the market over the next four to five months. He noted:
If you look at mid-term election years, you tend to average putting in a bottom somewhere around August or September. So, I think we’re in the process, we’re not complete yet. More fear, deeper flush will come over the next numbers of months.
The U.S. mid-term elections are scheduled for November 8th. Last week, Ritholtz’ Josh Brown also reiterated that now was the environment to stay in cash as the stock market could continue to slide.
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