The U.S. equities could continue to sink in the coming weeks, says the CIO of Short Hills Capital Partners. The S&P 500 index is now down nearly 5.0% from its intraday high on Thursday.
Steve Weiss’ remarks on CNBC’s ‘Halftime Report’
The U.S. inflation hit a record 8.5% in March, leaving the U.S. central bank with hardly an option other than being aggressive in raising rates this year. That, Steve Weiss said on CNBC’s “Halftime Report”, is reason enough to avoid stocks.
The Fed is the most aggressive I recall in decades. So, you just don’t fight it. I still think you want to be in cash right now. I think the market goes lower because the global tightening will continue weighing on averages and multiples.
Weiss has brought his exposure to equities below 30% this year and says he’d go lower if not for taxes.
Josh Brown agrees with the bearish view
Ritholtz CEO Josh Brown also agrees that it’s a bear market and it will continue to be one amidst Fed tightening. The central bank has signalled it will reduce its balance sheet by $95 billion a month that could start as early as next month. On the same CNBC interview, Brown said:
The Fed is trying to destroy demand. That’s the mechanism by which they cool off the economy. The majority of stocks peaked in Feb 2021, and have not made a new high since. That’s over a year of declining prices with only a handful of sectors holding us up here.
Brown is closely watching Apple Inc and Microsoft Corp, both of which are reporting next week. Any weakness in the two, he says, will bolster the thesis that the U.S. equities will slide further down.
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