Dan Niles sees a ‘final gasp’ rally between now and Christmas earlier than issues get ugly once more in 2023
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Hedge fund supervisor Dan Niles stated the market is in one other bear-market rally and investor sentiment might flip bitter once more within the new 12 months. “I believe you are going to see a rally between right here and Christmas, since you do have a whole lot of positives within the sense that you have the concern of lacking out,” Niles stated on CNBC’s ” TechCheck ” on Monday. The founder and senior portfolio supervisor of the Satori Fund stated one other catalyst is buyers including publicity to Chinese language shares after the nation began to ease its Covid Zero coverage. The S & P 500 gained greater than 1% final week, posting its second constructive week in a row. The benchmark remains to be down 15% this 12 months. Niles believes after the year-end rally, shares might see extra losses as company earnings are about to deteriorate. “The issue is you are going to get to the top of this 12 months, after which you are going to need to report numbers and you are going to enter pre announcement interval. And I believe that is when issues get ugly,” Niles stated. A collection of aggressive fee hikes will have an effect on demand negatively and trigger a slowdown in earnings, Niles stated. The Federal Reserve began in March to aggressively hike charges and combat inflation working on the quickest tempo for the reason that early Eighties. “We nonetheless consider that after you get type of this subsequent bear market rally working, it is final gasp, then you definitely go and retest or break to new lows if you get into 2023,” Niles stated. “Our view isn’t any totally different that that is simply one other bear market rally, however attempting to benefit from that issues are going fairly properly.”
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