Stocks could be in bear market until 2023, expert warns
Dow fell more than 1,100 points Wednesday in worst day since 2020
Stocks in bear market until next year’s ‘bottom’: Expert
Piper Sandler chief investment strategist Michael Kantrowitz tells investors to stay defensive, and not to call a market bottom until 2023.
After U.S. stock plummeted Wednesday and two of the nation’s largest retailers signaled major inflation concerns, one expert argued the market still hasn’t reached its bottom yet on "Mornings with Maria" Thursday.
"We think there's a potential that stocks are in a bear market until next year when we finally see a bottom and a recovery in economic activity," Piper Sandler chief investment strategist Michael Kantrowitz told FOX Business’ Maria Bartiromo.
"Stay defensive, and don't try to be calling a bottom here," he further advised.
Kantrowitz's comments come a day after the Dow Jones Industrial Average posted its biggest loss since 2020, plunging over 1,100 points, or 3.6%, the Nasdaq Composite tumbled nearly 5% and the S&P 500 dropped 4%.
WHITE HOUSE ADMITS STOCK MARKET ‘NOT SOMETHING WE KEEP AN EYE ON EVERY DAY’
In addition, Walmart and Target both confirmed inflation headwinds are intensifying this week, with Target’s shares dropping 25%, the most since 1987, and Walmart seeing an 11% decline.
Piper Sandler chief investment strategist Michael Kantrowitz argues stocks are in a bear market until they hit a "bottom" in 2023 on "Mornings with Maria" Thursday, May 19, 2022. (iStock)
"What we have now taking place is a collision between fears of rising inflation and rising interest rates to fears of a slowing economy and earnings estimates that are way too high still on Wall Street," Kantrowitz explained. "Those are really the big risks in the market."
Kantrowitz also noted that recession fears are starting to simmer amongst investors.
"History is very clear – when you get rates and inflation to go up together and oil prices to rise, it always creates a slowdown," the market expert said. "And in most cases, it is a recession."
But, Kantrowitz reiterated the U.S. isn’t there yet despite the additional investor nervousness around recession and the "definite" possibility GDP could remain in the negative.
"Whether or not we're in a recession right now, I don't think we are," he said. "But what I do think is that the data are going to continue to weaken, pushing us further in that direction. And as that plays out, investors will continue to increase their fears around a recession."
"The direction of the date is more important than where we are sitting today at the moment," he said.
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Interest rates, gas prices, inflation going up ‘always’ leads to economic slowdown: Expert
Piper Sandler chief investment strategist Michael Kantrowitz says the biggest risk in the market is the collision of a slowing economy and inflated earnings estimates.
White House press secretary Karine Jean-Pierre had said Wednesday that the stock market is not something the White House tends to "keep an eye on every day."
Earlier this year, former White House press secretary Jen Psaki said Biden "does not look at the stock market as a means by which to judge the economy."
FOX Business’ Kyle Morris contributed to this report.