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US Stocks will bottom once Fed signals shift

Bloomberg
Bloomberg5/24/2022 10:22 PM GMT+08  • 3 min read
US Stocks will bottom once Fed signals shift
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US equities may see more losses before the Federal Reserve signals end to monetary tightening, according to Goldman Sachs Group Inc. and Bank of America Corp. strategists.

“The Fed has offered no help to risk assets and appears far from stepping in,” BofA strategists including Benjamin Bowler said in a note on Tuesday, adding that market stress indicators, such as credit spreads and liquidity in S&P 500 futures, are now at levels seen during previous Fed interventions. “We believe markets will continue to test the Fed put, but that it will take more market panic for the Fed to start panicking.”

Over at Goldman Sachs, strategist Vickie Chang said the selloff in equities will reach a bottom once the Fed signals the end of tightening--which may not happen until recession is apparent.

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