2024-07-18 10:14:40 ET
Summary
- The Dow Jones Industrials hit a new all-time high, while the Nasdaq Composite had its worst day in nearly two years.
- Predicted 3-5% summer pullback in S&P 500 due to a correction in tech stocks, but fundamentals remain strong.
- A correction in the tech sector is expected to lead to reallocation into value-oriented sectors and small-cap stocks, improving market breadth.
Yesterday was more of the same in terms of rotation, as the Dow Jones Industrials surged to a new all-time high, while the Nasdaq Composite had its worst day in nearly two years. One month ago, I advised investors to prepare for a summer pullback of 3-5% in the S&P 500 instigated by a correction in the largest technology-related stocks that were responsible for most of this year’s gains. My reasoning was largely technical, as I did not see a meaningful deterioration in the fundamentals that would raise concerns about my long-standing view that the economy would land softly or that the bull market would continue over the coming 6-12 months. I think that a pullback is underway and should serve to refresh the uptrend in the broad market, as well as provide investors with another opportunity to invest in risk assets....
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For further details see:
Still Preparing For A Summer Pullback