FXT Investments forecasts the next US stock rally this week
According to Michael Wilson of Morgan Stanley,Despite Nvidia's bumper earnings report, U.S. stocks fell last Thursday, indicating that this year's rally has "ended" and a sign of continued declines in the future.
The bearish strategist recently admitted that he was too pessimistic about the outlook for U.S. stocks in 2023. But he still said the market's reaction to the U.S. chipmaker's explosive guidance was just a sign that the stock market had peaked. On Thursday, the S & P 500 index rose in early trading, but closed down 1.4%.The biggest drop in three weeks came as rising bond yields overshadowed artificial intelligence.Wilson said in an interview:
"The market peaks on good news and bottoms on bad news. I can't think of better news than Nvidia. 'Nvidia's earnings failed to lift the market' is another negative technical signal for the stock market that the rally has died. Now we need another piece of news to get the stock market going, but I don't know what it is."
U.S. stocks are set for their first monthly decline since February as investors worry that the central bank will remain hawkish for longer amid signs of economic recovery. Powell reiterated his resolve to fight inflation at the Jackson Hole conference on Friday.It indicates that monetary policy will be further tightened in the future if necessary.
Bank of America strategist Michael Hartnett shares Wilson's view.He believes that the boost from artificial intelligence will gradually fade in the second half of 2023 as interest rates rise for a long time and central bank liquidity weakens.
Last Friday, Nvidia closed down 2.43%. Steve Sosnick, chief strategist at Interactive Brokers, believes that,After a 54% increase in the past three months,FXTInvestors believe that the company's share price has fully reflected its real value."I think from the first round of buying, there was no follow-up," Mr. Sosnick said on one show. "If there was no follow-up and some profit-taking, you ended up with a chaotic day like yesterday."
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