There are three consensus views I see right now in the market:
US recession sometime 2H23
- US office real estate is a mess and will experience permanent loss/impairment
- The 4200 level on the SP500 is a HUGE technical level to watch here
Sean has forgotten more about market technicals than I know, but with 1Q23 earnings season pretty much in the books now and with the Fed in “pause” mode with regards to rate hikes, all eyes turn to the debt ceiling saga and the all-important 4200 level on the SP500. Everyone should expect the DC debt ceiling saga to go down to the last second of the last minute before a problem happens – and then our elected officials will cut a mediocre deal and/or kick the can down the road till August. Expect to be underwhelmed and likely exhausted by it all. It’s what they do. The 4200 is a HUGE technical level the market needs to overcome. A break-thru above 4200 would likely bring about new market buyers on the breakout, covering of negative positioning already in place due to weak investor sentiment/debt ceiling hedging, and a nice wave of momentum and breadth with regards to market technicals.
To put it simply, the market needs to get its leg over the 4200 level and clear the hurdle. We’ve been rangebound for close to a year now. This is not a small level to ignore.
All eyes on 4200…and beyond.
Source: Bloomberg data as of May 22, 2023
Chief Investment Officer
Congress Wealth Management LLC (“Congress”) is a registered investment advisor with the U.S. Securities and Exchange Commission (“SEC”). Registration does not imply a certain level of skill or training. For additional information, please visit our website at congresswealth.com or visit the Investment Adviser Public Disclosure website at www.adviserinfo.sec.gov by searching with Congress’ CRD #310873.
This note is provided for informational purposes only. Congress believes this information to be accurate and reliable but does not warrant it as to completeness or accuracy. This note may include candid statements, opinions and/or forecasts, including those regarding investment strategies and economic and market conditions; however, there is no guarantee that such statements, opinions and/or forecasts will prove to be correct. All such expressions of opinions or forecasts are subject to change without notice. Any projections, targets or estimates are forward looking statements and are based on Congress’ research, analysis, and assumption. Due to rapidly changing market conditions and the complexity of investment decisions, supplemental information and other sources may be required to make informed investment decisions based on your individual investment objectives and suitability specifications. This note is not a complete analysis of all material facts respecting any issuer, industry or security or of your investment objectives, parameters, needs or financial situation, and therefore is not a sufficient basis alone on which to base an investment decision. Clients should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed or recommended in this note. No portion of this note is to be construed as a solicitation to buy or sell a security or the provision of personalized investment, tax or legal advice. Investing entails the risk of loss of principal.
Comments are closed.