It has been said that Goldman Sachs had a 5,100 S&P 500 target for year-end 2022, and thought the fed funds rate would be at 1% by the same deadline.
This might explain why Goldman held those targets. There was a rash of articles and CNBC comments lambasting the Fed and Powell that started about 3 weeks ago. This is a Bespoke table cut-and-pasted from the October 6 “Chart of the Day”.
The Fed fiddled while the US capital markets burned.
This should infuriate most investors, but that is wasted energy. My guess is they could be late in reducing the fed funds rate when the time comes too.
This blog thought the June 2022 lows would hold, but that doesn’t appear to be the case. Next major support for the S&P 500 is 3,550 or the 50-month moving average.
Great chart from Mike Zaccardi. What’s interesting is the current EPS estimates vs the “peak”: 2022 EPS is down about 3% and 2023 EPS estimate has slid about 4%. That’s still not very severe.
Gary Morrow from a LinkedIn post on the “midterm election year” effect. Note the Nov – April return profile.
The midterm elections were a month from yesterday, or will take place November 8, 2022.
From JP Morgan’s Guide to the Market as of 9/30/22:
If you are wondering which sectors might be impacted by the strong dollar, here’s each sector of the S&P 500 and it’s % of Non-US sales:
- Energy: 39%
- Materials: 56%
- Financials: 22%
- Industrials: 32%
- Consumer Discretionary: 34%
- Technology: 58% (!)
- Communication Services: 42%
- Real Estate: 16%
- Health Care: 37%
- Consumer Staples: 44%
- Utilities: 2%
- S&P 500: 40%
Financials, Utilities and Real Estate are the lowest % of Non-US sales. That could help financials this week as they report Q3 2022 earnings.