The S&P 500 index continues to dwell under the 4,000 level, but Karen Firestone says there’s reason to believe the U.S. equities will rally in the coming months.
Firestone’s remarks on CNBC’s ‘Squawk Box’
The last couple of months, change between intraday high and low has been 2.0% on average. Historically, two-thirds of the time market is higher by a significant amount in subsequent six months when that happens. So, odds are in favour of a rally.
Last week, famed investor and Mad Money host Jim Cramer also said a technical indicator was pointing to a very powerful bear market rally in the coming weeks. SPX is down 20% for the year at present.
Unlikely that S&P 500 tanks to 3,400 level
Firestone agreed that there might still be a bit more downside in the S&P 500 but not to around 3,400 level as many have warned in recent weeks. Speaking with CNBC’s Joe Kernen, she noted:
S&P 500 traded at 3,400 level in March of 2020 when we were looking into the abyss of closing the world, and the end of society, and whatever could possibly happen. Are we at that level of fear and possible dislocation? I don’t think so.
The U.S. CPI remained near 40-year high of 8.30% in April. Still, Firestone quoted retail earnings as she suggested that inflation was coming down sooner-than-expected.
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