Takeaways & Key Expectations
June 08, 2022
Equity Market Commentary - June 2022
Takeaways & Key Expectations
Equity Market Commentary - June 2022
June 08, 2022
I think there is a greater than 50% chance that the S&P 500 intra-day low of May 20th (S&P 500 = 3810) was the market low for the year.
There are plenty of reasons why that may not be the case, but I am increasingly of the opinion that, while it’s not necessarily clear sailing from here, that low might hold.
Let’s begin with a discussion of the three supporting reasons for my conclusion before moving to the arguments against.
So, will we have a recession this year?
That question leads to my final reason of why May 20th could have been the low for the year:
Clearly, corporate America does not see the same level of weakness that the stock market is projecting.
All in all, the arguments are compelling for May 20th being the equity market low for the year, so why wouldn’t I indicate more confidence than a “greater than 50% chance”?
Because there are plenty of issues to cause worry:
Therefore, the recession call becomes key.
But if there is no recession, stocks could be substantially higher by the time that is apparent.
I am not in the ‘recession is coming’ camp. I agree with corporate America, but clearly, we cannot rule out the possibility.
So what’s an investor to do?
Finally, two quick points on AEA’s portfolio positioning.
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