(Bloomberg) – Apple Inc. From Tesla Inc. So far, some of the big names in the S&P 500 index have been relegated to a relentless sell-off that pushed the broader equity benchmark into bear market territory on Friday.
Most read from Bloomberg
The S&P 500 fell 2.3%, dropping more than 20% from its record high on January 3, before rebounding for a slightly modified close. The index has now fallen for seven consecutive weeks, a recession that intensified this week as retailers downgraded their earnings outlook, raising concerns about whether consumers could withstand rising inflation amid concerns about a slowdown in economic growth.
Here’s what Wall Street professionals are saying about what’s happening and what it means:
Greg Taylor, Chief Investment Officer of Purpose Investments.
“It simply came to our notice then. It shows a complete lack of trust with buyers. Markets are starting to sell out here and we’re going to see if the bear market bounces in the next few weeks. “
Art Hogan, chief market strategist at National Securities.
“All of this has been driven by two major forces that were repeated this week: one is inflation and how stubbornly high it is. And the second is how aggressive the Federal Reserve will be in bringing it under control. It has manifested itself in the absence of some revenue from Walmart and Target where input costs are not going to customers and profit margins are being squeezed and everyone is expanding it to the rest of corporate America. “
“I think it’s probably the wrong thing to do, but here and now, it’s hard to stop this body in motion after it starts moving.”
Adam Phillips, Managing Director, Portfolio Strategy, EP Wealth Advisors
“The Fed gives and the Fed takes away. Obviously, anyone still hoping for a Fed put is dreaming, and we hope that for some reason the unrest here will continue. No. The market is waiting for answers that are unlikely to come for some time, and it is never good when retail sentiment is low and investors are left alone with their thoughts to guide them. “
Mike Mulani, director of global market research at Boston Partners
“It’s bound to happen because I think the Bears wanted to push it there. And a fair amount of people have become bearish. Positioning is making sense right now.”
Ed Moya, Onder Senior Market Analyst
“With the S&P 500 indicator in the bear market area, traders will probably continue to fade every rally until the Fed expresses concern about market performance. Inflation is the No. 1 enemy for the Fed, but if the credit situation deteriorates and monetary diversion becomes a problem, the Fed may change its approach to tightening them. “
Jason Brady, CEO and President of Thornberg Investment Management
“In my view, we are going to go into recession next year. We see that there is a lot more value outside of the United States and we are actually looking for global investment. The Fed will be blamed when the recession strikes, probably right, because they waited too long. “
Ross Mayfield, an investment strategy analyst at Robert W. Baird
“We see cracks in consumers through retailers’ reports, but consumers are still fairly strong overall and still have all the extra savings we said. Wage gains are still strong. And so while inflation really weighs on sentiment and at some point will probably weigh on spending, consumers are still there and earnings growth is still there. So this has mostly been multiple contractions. It’s ugly, but it was actually, under the surface, not as bad as it looks. “
(Updated with closing price in the second paragraph.)
Most read from Bloomberg Business Week
© 2022 Bloomberg LP