{"id":41950,"date":"2023-07-29T09:07:00","date_gmt":"2023-07-29T13:07:00","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/puzzled-by-the-stock-market-surge-overshoots-are-the-new-normal-bank-of-america-strategist-says\/"},"modified":"2023-07-29T09:07:02","modified_gmt":"2023-07-29T13:07:02","slug":"puzzled-by-the-stock-market-surge-overshoots-are-the-new-normal-bank-of-america-strategist-says","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=41950","title":{"rendered":"Puzzled by the stock-market surge? Overshoots are the new normal, Bank of America strategist says"},"content":{"rendered":"<div id=\"js-article__body\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0002336942\" role=\"document\">\n<p>Stocks have surged this year without really anything going right, besides the rolling out of error-prone artificial intellligence chatbots. Interest rates have surged to a 22-year high, earnings are down from last year, and pandemic-era savings are being drawn down if not entirely exhausted.<\/p>\n<p><strong>Read more:<\/strong> Those extra pandemic savings are now wiped out, Fed study finds.<\/p>\n<div class=\"paywall\">\n<p>Strategists at Bank of America led by Michael Hartnett have an interesting theory.<\/p>\n<p>\u201cAsset price overshoots [are] the new normal,\u201d they say.<\/p>\n<p>Consider:<\/p>\n<ul class=\"articleList\">\n<li>\n      Oil<br \/>\n        CL00,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/209723049\/delayed\" class=\"positive\">+0.11%<\/bg-quote><br \/>\n       went from -$37 in April 2020 to $123 in March 2022, then down to $67 the following 12 months.<\/p>\n<\/li>\n<li>\n      Bitcoin<br \/>\n        BTCUSD,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/108573962\/realtime\" class=\"negative\">-0.16%<\/bg-quote><br \/>\n       went from $5,000 in January 2020 to $68,000 in November 2021, down to $16,000 a year later, and up to $29,000 now.<\/p>\n<\/li>\n<li>\n      The S&amp;P 500 went from 3300 to 2200 to 4800 to 3500 to 4600 thus far in 2020s.<\/p>\n<\/li>\n<\/ul>\n<p>\u201cAI is simply the new overshoot,\u201d they say.<\/p>\n<p>The S&amp;P 500<br \/>\n        SPX,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/210599714\/realtime\" class=\"positive\">+0.99%<\/bg-quote><br \/>\n       has gained 18% this year as the Nasdaq Composite<br \/>\n        COMP,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/210598365\/realtime\" class=\"positive\">+1.90%<\/bg-quote><br \/>\n       has rallied by 34%.<\/p>\n<p>Hartnett and team noted that real retail sales \u2014 that is, adjusted for inflation \u2014 fell at a 1.6% year-over-year clip, which has coincided with recessions since 1967. Real retail sales falls in excess of 3% are associated with hard recessions.<\/p>\n<p>Historically, a 2-3 point rise in the savings rate also is recessionary, and already it\u2019s risen from 3% to 4.6%. The unemployment rate so far hasn\u2019t risen, though a 0.5 point to 1 point rise in the jobless rate also is typically recessionary.<\/p>\n<p>\u201cIt would be so \u20182020s\u2019 for the economy to hit a brick wall just as everyone punts \u2018soft landing\u2019 into 2024,\u201d they say.<\/p>\n<p>They like emerging market\/commodities as summer upside plays and credit and tech as autumn downside plays.<\/p>\n<\/p><\/div>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.marketwatch.com\/story\/puzzled-by-the-stock-market-surge-overshoots-are-the-new-normal-bank-of-america-strategist-says-1b1a5fd?mod=markets\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Stocks have surged this year without really anything going right, besides the rolling out of error-prone artificial intellligence chatbots. Interest rates have surged to a 22-year high, earnings are down from last year, and pandemic-era savings are being drawn down if not entirely exhausted. Read more: Those extra pandemic savings are now wiped out, Fed [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":41951,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-41950","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Puzzled by the stock-market surge? 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