Slower, but higher rates and no pivot this side of Christmas. It was the message from Fed Chairman Jerome Powell after the central bank’s fourth straight hike. Bruised investors look set to continue selling stocks on Thursday as yields rise.
Not everyone agrees with Powell. “The Fed is making a huge policy mistake, and they will manage to break something. Rate hikes are good enough. The more wrong,” says the president of macroeconomic research firm Lamoureux & Co., Yves Lamoureux.
The forecaster also provides our call of the daywhich will encourage bulls as he looks to medium to long-term years for stocks, even though Powell has thrown a “short-term wrench in the engine.”
This column last spoke to Lamoureux in Marchwhen he declared the end of a trilogy of rolling bear markets he accurately predicted from the 2020 pandemic lows. that this now extends to 2026 due to the “damage” that has been done.
And while bull market conditions don’t look great now, “they will because we’re going higher and stocks are up,” he told MarketWatch in a recent interview.
“People are so overwhelmingly negative that it gives me even more confidence than ever before that I’m on the safe side,” Lamoureux told MarketWatch. Also in March, he predicted that the 10-year Treasury yield would hit 4%. The move came earlier than expected, and he sees this cycle ending and lower rates ahead, supporting equities.
To be clear, Lamoureux holds individual names, not indexes, and says May or June marked the bottom for many stocks that failed to hit new lows like the Nasdaq Composite.
COMP
or S&P 500
SPX.
He bought the Robinhood scholarship app
HOOD
in June, for example, and notes that it has since rebounded around 50% from those lows.
He also owned Netflix
NFLX
and Roblox
RBLX
at times, noting that these stocks have also rebounded from early summer lows.
“People have made the mistake of looking at the index which is made up of, you know, four or five large caps which are Microsoft, Facebook, and these things have been trapped. And they look at the Nasdaq and they think oh we have made a new low. I’m looking at individual stocks because those are the ones I own,” he said.
He says investors should avoid the “infamous large caps” that everyone wants to own. He prefers names that have leadership in their own segment and have some value, like Netflix, which he bought for around three times the sale price.
The problem facing investors today is that “they don’t have the instinct to sell,” the forecaster said. This is vitally important for the future, because if investors see a bull market through 2025, for example, it could mark a “very important high that won’t be crossed for another 10 years”, he said. -he declares.
“So if you haven’t learned how to sell, the market is probably going to crash for 10 years,” and this type of market is difficult for those who have become accustomed to buying and holding, he said. .
As for the higher ride, Lamoureux says it’s going to be “straight, faster than we’ve ever seen” in part because there’s a ton of cash on the sidelines. “I think it will make people’s heads spin and say, ‘Oh my God, why am I not in the market?’
As for his stock picks, Lamoureux remains a fan of Robinhood and a previous mention Bakkt Holdings
BKKT,
which is “slowly building massive cryptographic infrastructure for companies like Visa, Matercard, Global Payments, Fiserv, etc.”
Lamoureux has two final points to make. The first is that it is now turning bearish on the US Dollar after being bullish since 2014. This dollar weakness, which will be good for stocks and cryptos, is due to the US producing its own oil and not do not require oil outlets. dollars to pay for this product.
Lamoureux & Co.
And a weaker dollar may push gold up to 2028 and to a level of $4,000, also because of geopolitical tensions, he said. “I think we’ll see some choppy waters around 2026, 2027 and I think gold may still go higher because people will really see it as a safe haven,” he said.
Lily: What’s next for markets after the Fed’s fourth consecutive interest rate hike
The steps
MarketWatch
Equity Futures
YM00
are falling, the two-year Treasury yield
BX:TMUBMUSD02Y
to her highest since 2007with the dollar
DXY.
Oil prices
CL
and gold
GC00
are under pressure. Hong Kong’s Hang Sang
Hong Kong: HSI
fell by almost 3%, major losses across Asia.
The buzz
Better than expected results of Burger King parent Restaurant Brands’
RSQ
raises shares, while Moderna
mRNA
is down 12% after earnings are well below expectations and Peloton
PTON
is down nearly 20% over a weak holiday forecast.
After the close we will hear from Coinbase
PIECE OF MONEY,
Starbucks
SEX,
PayPal
PYPL
and Door Dash
DASH
among many others.
Among those who reported on Wednesday evening, Qualcomm
COMQ
is down more than 7% in premarketing after a poor outlook which included an overabundance of chips. Year
YEAR
is 20% after the streaming service’s upbeat results, but a disappointing holiday prospects and advertising budget issues. eBay
EBAY
are up after the respective results, as well as WWE
WWE
Morgan Stanley
MRS
would have prepare for global layoffs because the negotiation slows down. And Elon Musk should lay off half of Twitter’s staffmaybe by Friday.
A day ahead of payrolls data, weekly jobless claims are due at 8:30 a.m., alongside the trade deficit, third-quarter productivity and unit labor costs. The Institute for Supply Management’s services index and factory orders are due at 10 a.m.
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