QQQ - The Stock Market Is Vulnerable But On Solid Footing

2024-05-03 04:50:00 ET

Summary

• The outlook for earnings growth remains fairly positive, but much of this is already in the price.
• While it’s clear, there are some shorter-term headwinds facing risk assets over the coming few months.
• There is every chance markets continue to march higher into mid-year and beyond in the face of these short-term headwinds.

Short-term headwinds for stocks

I have written a few times recently on the short-term headwinds arising for the stock market following two consecutive quarters of positive price action and what has been a terrific six months for risk assets. Pullbacks and even 10-15% corrections are a normal part of bull markets, and when sentiment and positioning across all risk assets become as extreme as it has in recent weeks, markets generally need to go lower before they can go higher....

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