GS - Market Correction Expected: 20 Stocks To Buy If It Worsens

2024-04-19 05:40:41 ET

Summary

• A market correction of 10% or more occurs every 1.2 years, re-adjusting valuations and setting the stage for the next leg up.
• The stretched stock positioning and strong double-digit returns in Q1 are pointing to investors re-evaluating the H2 outlook and portfolio rebalancing.
• Red flags for the stock market include insider selling, a 10Y treasury yield spike, and ongoing global tensions.
• The US consumer is strong, with the economy growing 3.4% in Q4, prompting upwards EPS revision of the S&P 500 index.
• I am expecting a correction of anywhere between 8% and 15%, presenting good opportunities to buy quality holdings for long-term investors.

Market Correction

The market has been running hot this year, rewarding investors, with SPDR S&P 500 ETF Trust ( SPY ) being up over 10% in a matter of first quarter.

Since its low of $409 back in October last year, the index has returned over 32%, catching many by surprise and leaving investors, who moved to cash, underexposed to stocks....

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