Ha, ha. I'm on record here claiming that Powell is an idiot approaching the idiocy of Greenspan who testified after the GFC, "who knew". I know who knew, everyone on this board who'd been writing about that slow moving train wreak for years. That said, this is, in my opinion, a cyclical bear market. That was a secular bear - the third one in 100 years. Cyclical bears last 6-9 months. Powell could interrupt a move back up with a 75bp raise. As I said the other day, we have to watch the August CPI and to some extent the PPI as the Fed meets the following week. Once we see the CPI report we should have a good idea where Powell will go.
I think June was the bottom and since then we've rotated out of defensive sectors and into growth. Powell's 'pain' comment last Friday scared the market and reversed that trend but I see this as a buying opportunity. The great majority of my buying since mid-June has been in growth.
We may test the bottom again in September which is why I'm not adding here but I think we'll be higher by the end of the year. Maybe not a new high, but higher than we are today. I think the SPX will be over 5,000 by the end of next year, led mostly by software, semis, internet, etc.
Looking at the issues we have today, the chart below is an interesting one as it shows we've broken below the long upward trend in consumer disposable spending. Because of inflation and higher interest rates Americans are spending more on basic needs.
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