A major US investor, heading an investment firm, expected Wall Street’s leading S&P500 index to fall 43%, despite statements by Federal Reserve Chairman Jerome Powell, who gave A boost of enthusiasm for the markets during the past few days.
Powell hinted at a 50 basis point hike in the federal interest rate, up from 75 basis points expected in December, but Bull & Bear Profits founder and CEO John Wolfenberger downplayed the significance of those statements. stating they are not new.
In an interview with Market Watch, Wolfenberger indicated that investors “may have gotten overly excited this week about Fed Chairman Jerome Powell’s comments.”
Wolfenberger believes, in his analysis of the performance of the US market, that it has reached historic bullish levels and peaked in early 2022, and is still in a very bullish area so far.
He continued, “This bearish technical setup for the stock market, combined with overly bullish investor sentiment, indicates that we are likely to see another major bear market sell-off soon.”
Wolfenberger said the recession could start any day and end in late 2023 or early 2024.
Far from the more optimistic forecasts seen elsewhere on Wall Street, Wolfenberger expects the S&P 500 to drop 43% from its current levels, despite an expectation of a mid-2023 bottom.
He says this bear market will last for 18 months, which is not far from the 17-month bear market seen during the global financial crisis.
