Bear markets come in three stages; A veteran analyst says we’ve only just started the second.

Stocks will start half of the Black Friday session near 10-week highs, after rebounding in part on hopes that the Federal Reserve will slow the pace of interest rate hikes as it waits to see how previous tightening affects the economy.

Thus, investors are looking forward to when the Fed can finally start to taper off and borrowing costs lower. For now, they show few concerns about how much damage an economic slowdown could do to corporate earnings.

This is all very rosy, Peter Boockvar, chief investment officer of Blakeley Financial Group, reckons. In an interview with Magnifi+, an AI investment and trading platform, the veteran analyst warned that stocks will decline next year, and we haven’t seen the bottom of the bear market still in its middle stage.

Bear markets usually come in three stages. The first is we’re taking a lot of the frothy excess and euphoria out of the market in terms of the juicy names that we saw in 2021 and lowering the price-to-earnings ratio. We did that, and our earnings went up 22x, call it 16 to 17,” Boockvar says.

In the second stage, he adds, investors begin calculating the economic consequences and the company’s profits of the continued rises in interest rates…”And then the third stage is that everyone throws in the towel. No one wants to own a stock again, and that’s your bottom and that’s when you You need to buy shares.

“I feel like we’re really just getting started on that second phase,” he said.

However, there will be opportunities. It all depends on your date range, according to Bokvar.

“If you have a big purchase that you have to make in the next year or two, whether it’s a kid going to college or a wedding, a bar mitzvah or some other expense like the house you’ve set aside money for, you shouldn’t be in the stock market. You should. It should be in the bank, it should be in short-term treasury bills, it should be in cash equivalents because the next two years will be challenging for those with shorter-term time horizons.

So, what assets is he interested in? Bonds are attractive, but it’s important to stick to quality.

“You have investment-grade bonds that yield 6% and you can do that without risking a long term by buying shorter terms…and you can buy a two-year short-term Treasury and get a yield of four and a half percent and get some attractive monis as well. So I think that Fixed-income land, with shorter durations, is more attractive.“Long-term trade periods, I’m still more skeptical about that,” says Boockvar.

And in stock? “Value stocks are more attractive than growth, technology stocks. I think commodity stocks are more attractive than they have been for the last five years. Certainly energy, precious metals and even industrial metals like copper stocks.”

If the dollar peaks and dips as the Fed nears the end of its hiking cycle, Boockvar likes the look of overseas markets, especially in Asia, and gold and silver once the central bank starts cutting interest rates.

Finally, the one thing he’s definitely not keen on is his former tech darlings. JUST BUY GOOGLE GOOGLE
and Amazon AMZN
and Apple AAPLAnd the
While they are all great companies, that ship has sailed and the baton in the market will be passed to other parts of the market,” says the analyst.

markets

Stocks were in line to start the last trading of the week on top, with the S&P 500 ES00 futures
rose 0.2% to 4,039 and BX 10-year Treasury yield: TMUBMUSD10Y
It changed little at 3.709%. US crude futures fell 0.7 percent to $79.50 a barrel.

For more market updates as well as actionable trade ideas for stocks, options, and cryptocurrencies, subscribe to Investor’s Business Daily’s MarketDiem.

uproar

It’s a half day of trading on Wall Street as many traders are also extending the Thanksgiving holiday. Expect very slim portions.

Analysts and investors are still looking for guidance on how the Black Friday sales will go. How will the American consumer withstand high inflation and sharp increases in borrowing costs? Stocks in Amazon AMZN
and Walmart WMT
It was relatively stable.

Shares in Tesla TSLA
They were up nearly 2% in pre-market activity despite news that the automaker is recalling about 80,000 vehicles in China.

Activision Blizzard ATVI stock
fell more than 3% after a report late Wednesday that the Federal Trade Commission could block Microsoft’s purchase of the video game maker.

Fed’s Bullard is scheduled to speak on inflation and interest rates at a MarketWatch Q&A on Monday. Register here to watch the program and ask a question.

China’s central bank has eased monetary policy as the country grapples with further COVID-19 outbreaks.

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chart

Here’s an interesting note about stock volatility from Benedek Vörös, Director of Index Investment Strategy at S&P Dow Jones Indices.

“It’s been a turbulent year, but a degree of relative calm has returned to US equity markets in the past few weeks, and options market participants seem more relaxed than their cash counterparts,” Foros wrote in his latest post. “The VIX, after averaging 3 points above the S&P 500’s 21-day volatility over the past year, is down 6 percentage points from it as of yesterday’s close. Historically, that has had some predictive power for lower volatility in the future.”

Source: S&P Dow Jones Indexes

The most important indicators

Here are the most active stock market indices on MarketWatch as of 6 a.m. ET.

ribbon

Security name

TSLA

Tesla

GME

Jim Stop

AMC

AMC Entertainment

nio

nio

COSM

Kosmos Holding

AAPL

apple

Monkey

AMC Entertainment preferred

BBBY

bed bath behind

AMZN

Amazon.com

Mullen

Mullen Motors

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listening to The best new ideas in the money podcast With MarketWatch reporter Charles Pacey and economist Stephanie Kelton

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