- Roughly 70% of investors say the stock market has yet to bottom, per the latest MLIV Pulse survey.
- Around 35% says the lows won’t be in until the second half of this year.
- Despite the rally in January, investors are concerned that 2023 will be marked by weak earnings.
Investors are bracing for the US stock market to hit new lows this year amid concerns over weakness in corporate earnings.
Roughly 70% of investors say the stock market has yet to hit its bottom, per the latest MLIV Pulse survey. Around 35% said lows won’t be reached until the second half of 2023.
US equities have been on a tear in the past month, with the S&P 500 and the tech-heavy Nasdaq Composite up 6.02% and 11.04%, respectively. The S&P 500 is on pace for its best January since 2019. Still, only 18% of survey respondents plan to increase their exposure to the benchmark index in the next month.
The rally in equities, investors fear, could be hobbled by disappointing fourth-quarter results from tech giants like Meta Platforms Inc. and Apple Inc., according to the survey, which polled 383 investors. Both companies are slated to report earnings later this week.
After a slew of economic data points show inflation has been coming down, traders are shifting focus away from from the central bank’s expected interest rate hike this week. A quarter-point hike would be the Federal Reserve’s smallest increase in almost a year, which would be a welcome development after aggressive monetary policy helped crush stock prices last year. But any good news delivered by Fed Chair Jerome Powell during this week’s meeting could be overshadowed by weak earnings, investors say.
Around 90% of respondents expect inflation will keep falling this year, but will remain above the central bank’s target of 2%.