According to the latest MLIV Pulse survey, around 70% of investors say the stock market has yet to bottom. About 35% say the lows will not be reached until the second half of this year. Despite January’s rally, investors fear that 2023 will be marked by weak earnings. Something is loading.
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Investors are bracing for the U.S. stock market to hit new lows this year amid concerns about weak corporate earnings.
According to the latest MLIV Pulse survey, around 70% of investors say the stock market has not bottomed yet. About 35% said the lows would not be reached until the second half of 2023.
U.S. stocks have seen a tear over the past month, with the S&P 500 and the tech-heavy Nasdaq Composite up 6.02% and 11.04%, respectively. The S&P 500 is on course to record its best January since 2019. Yet only 18% of survey respondents plan to increase their exposure to the benchmark in the next month.
The rally in stocks, investors fear, could be hampered by disappointing fourth-quarter results from tech giants like Meta Platforms Inc. and Apple Inc., according to the survey, which polled 383 investors. Both companies are expected to report results later this week.
After a slew of economic data points show inflation falling, traders are turning away from the central bank’s expected interest rate hike this week. A quarter-point hike would be the Federal Reserve’s smallest increase in nearly a year, a welcome development after aggressive monetary policy helped crush stock prices last year. But any good news from Fed Chairman Jerome Powell at this week’s meeting could be overshadowed by weak earnings, investors said.
About 90% of respondents expect inflation to continue to decline this year, but remain above the central bank’s 2% target.