2024-08-13 10:24:49
Investing.com – BCA research strategists are confident that the market has already peaked in 2024.
Despite recent market activity, including rallies that have created cautious optimism among some investors, BCA analysts believe the peak has already been reached.
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This assessment followed an inquiry from a trader, who asked BCA Research whether the S&P 500’s July 16 intraday high of 5,669.67 or the August 5 low of 5,119.26 was the high or low of the year.
The majority of participants in an internal discussion at BCA agreed with the first option, with 55% believing that the July peak is the highest point of the year, although 37% still do not see a clear definition of the maximum or minimum of the year. year
The BCA described the recent stock market recovery as “illusory relief”. While the current trading environment is admittedly promising, indicators generally predicting financial trends are pointing to future turmoil, suggesting that any recovery will be short-lived.
Strategists recommend that only the most agile traders and investors actively participate in the market, and that others should stay away.
“There is no need to rush the exits, but it is recommended to reduce exposure to risky assets before all hope is extinguished from investment prospects,” the BCA report highlights.
“We recommend starting a strategy of moving from risky positions to defensive positions now.”
The broader economic outlook in recent weeks reinforces the conviction that the S&P 500 is already peaking.
Worrying data, such as a disappointing ISM manufacturing sector report and weaker-than-expected employment numbers, have undermined hopes for a smooth recovery in the US economy.
Currently, a narrow majority of BCA roundtable participants predict a recession within the next twelve months. Specifically, 53% of respondents expect a recession in the US economy, while 19% still expect a “soft landing” and 28% predict no major changes.
BCA strategists believe the S&P 500 could recoup some losses if upcoming economic data shows improvement, even a little. Investors hopeful of a smooth recovery may have some relatively positive news, especially considering key events such as the Fed meeting in Jackson Hole and the upcoming jobs report.
However, the BCA warns that market optimism is based on unstable fundamentals, pointing out that the economic consensus has not yet fully adjusted to the ongoing slowdown.
Investors should look for substantial evidence before changing their views, and the BCA predicts that clear signs of a recession may be needed by the end of the summer to take the situation away from a smooth recovery.
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