That seems a good, logical way for this to go.
PEs are still high if earnings estimates plunge for a potential recession, but my feeling is we just HAD a recession predicted by my leading indicator stocks like FDX rolling over a year ago and probably bottoming and testing that bottom already. Inverting yield curves and what have you predict a recession but rates have been so "artificially low" for so long I'm not sure we can trust that as a predictor for 2023 - that is there is still time to save things.
Also, if you told me 10 years ago that the Fed would LOWER rates to 3.5%, I'd think that was quite simulative. Raising rates to 3.5% by the end of this year, if that, is just lowering massive stimulus. Add in all the cash people with jobs have to spend on something, I think it will work itself out if the weather, water, electricity and gasoline disruptions due mostly to incompetent governments from the US to EU allowed to happen.
The bear argument is there are still too many crap companies, hedge funds, silly business models, etc. out there that need complete crushing, but we could see many of them fail without making a new low in quality stocks.
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