Some Experts Are Warning Of A ‘Bear Market Rally’—Here’s Why Stocks Could

Several Wall Street experts are warning that despite moving higher in recent weeks, the stock market still has further to fall—with recent gains likely to be nothing more than a “bear market rally,” as investor concerns about Fed rate hikes and slowing economic growth continue to weigh on markets. The optimism about inflation peaking and a looming “Fed pivot”—where the central bank pulls back from its aggressive tightening of monetary policy—is certainly “overdone,” while “nonsensical behaviors” are also returning to the market, according to Vital Knowledge founder Adam Crisafulli. Both factors should “temper” investors’ near-term enthusiasm as they suggest further downside risks—though on the bright side, the U. S. economy is proving “more resilient than it’s being given credit for.”“Investors are increasingly in a game of tug-of-war over bullish and bearish talking points,” says Nationwide chief of investment research Mark Hackett. “Confusion is driving investor decisions,” which generally leads to “directionless volatility,” he warns. What can investors do if the market does hit new lows? “Use bear market rallies to raise cash and rotate into higher quality assets,” according to analysts at Bank of America. “Keep dividend and bond coupon reinvestments paused and use tax-loss harvesting techniques ahead of better buying opportunities this year.”Stocks Under Pressure Despite Strong Jobs Report As Investors Fear Bigger Fed Rate Hikes (Forbes)Here’s Why More Fed Officials Are Warning That The Market Is Getting Ahead Of Itself (Forbes)Bed Bath & Beyond Surges Nearly 40% As Retail Traders Pile Back Into Meme Stocks (Forbes)Dow Jumps 400 Points As Stocks Rebound Thanks To Solid Earnings, Upbeat Economic Data (Forbes)

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