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Top economist David Rosenberg said the stock market looks “eerily similar” to 2022.
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The S&P 500 hit an all-time high in early January 2022, but then plummeted, ending the year down 20%.
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Analysts at Rosenberg Research said U.S. stocks present the biggest sign of weakness right now.
In the second half of 2021, stock prices began a massive rally. Then, in January 2022, sentiment deteriorated and the rally lost momentum. Sound familiar?
Top economist David Rosenberg sounded the alarm in a note published by Rosenberg Research on Monday, saying the market was experiencing a sense of deja vu.
“The setup for 2024 is eerily similar to when we entered 2022, with positioning, sentiment and technicals all at extreme values, consistent with what we saw in December 2021 (and more (Fundamentals are also deteriorating.)
The S&P 500 hit an all-time high in early January 2022, but has since fallen sharply. Ended the year with a 20% declinethe worst year since 2008.
In Rosenberg's monthly guidebook for active investors, the firm's analysts said U.S. stocks are in the biggest bear market of the moment.
“There is still much room for improvement in the risk-reward profile, and our model suggests reducing exposure or at least introducing appropriate hedging at this time,” they wrote.
According to the memo, one of the major stock market cushions will be the financial sector. That's because the sector typically performs well during periods of Fed hiatus and declining inflation.
Big banks have more capital to fall back on, and insurance companies have stable earnings growth and strong reputations.
It added that the financial, energy, communications services and utilities sectors were tied for second place.
Mr. Rosenberg has been waving the recession flag and recently said that recession deniers: repeat mistakes From the dot-com bubble and the housing bubble.
A few weeks ago, the former Merrill Lynch economist also warned that stock market gains “will be sluggish.”messy january. ”
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