Posted 2/26/2024, 2:57:00 PM
Market Vulnerable to 10% Drop on Any Bad News, Says Research Firm
- Sevens Market Research believes any "bad" news could cause a 10% stock market drop in the current environment
- The recent stock rally makes sense with expected Fed rate cuts, falling yields, slightly declining inflation, and resilient growth
- But the relentless rally has gone far beyond improvement in fundamentals and reasonable expectations
- At 22x earnings, Sevens believes the market is pricing in perfection and is vulnerable
- With the market stretched, Sevens worries any "bad" news could easily cause a 10% drop much more than "good" news could rally 10%