I was ‘ambushed’ on a plane on Saturday by a pleasant enough bloke who wanted to know what I expected would happen to stocks in coming months. And like many people who put me on the spot, he wanted to hear my view and hoped I’d agree with what he thought. And he was keen to let me know all about his expectations for stocks.
He was in the “we could revisit the December lows” camp, which I’m not so sure about. Certainly I do have experts who appear on my TV show, who think the US stock market, after its recent rebound after slumping close to 20% on the S&P 500 index, could retest the December lows. But, as I say, I have my doubts.
You see, there were two big drivers of Wall Street’s sell off from October to December. The chart below clearly shows it.