It is estimated to be the biggest confusion in the minds of many investors.
1. Small-cap stocks are not affected, which may be a rebound signal
The Federal Reserve hiked rates by another 75 basis points in September, insisting on keeping inflation in check, and there are some signs that a longer-term market bottom is forming, most notably hope that the small-cap Russell 2000 Index (.US)$ The June low has been held for the past time.
2. The sentiment of the US stock market is fragile, and any "good news" such as macroeconomic recovery may rebound
I think the U.S. stock market has outperformed expectations so far this year and will likely continue into the end of the year. In addition, low investor positioning and moderation in long-term inflation expectations should help buoy shares. In fact, corporate earnings revisions have fallen sharply.
Considering inflation, the Russia-Ukraine conflict, and the uncertainty of the U.S. stock market mid-term elections, and with investor sentiment so sluggish, any positive earnings growth or better-than-expected news may be welcomed by investors and have a positive impact on stock prices. Huge impact because most people are preparing for the worst.
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