S&P 500 IndexShort
S&P will fall to 3400
And here is why:
- rising FED rates: J.Powell said clearly that they will move rates to "neutral" so it means in the end of the year we'll see 2.5% or even 3% which I think is NOT already reflected in prices;
- sale of bonds: Starting June 1, the FED will sell 30bn of Treasury bonds and 17.5bn of mortgage-backed securities. From September, the volume of sales will increase to 60 and 35 respectively;
- risk of recession or stagflation: in Q1 2022 economy of US showed "negative growth" for 1.5%. Now wee see all decline in economic activity, rising inflation, rates growth and strong labor market. All of the above points that we are already in late business cycle which easily may transform to recession.
- rising FED rates: J.Powell said clearly that they will move rates to "neutral" so it means in the end of the year we'll see 2.5% or even 3% which I think is NOT already reflected in prices;
- sale of bonds: Starting June 1, the FED will sell 30bn of Treasury bonds and 17.5bn of mortgage-backed securities. From September, the volume of sales will increase to 60 and 35 respectively;
- risk of recession or stagflation: in Q1 2022 economy of US showed "negative growth" for 1.5%. Now wee see all decline in economic activity, rising inflation, rates growth and strong labor market. All of the above points that we are already in late business cycle which easily may transform to recession.
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