The upside from the March lows has been truly phenomenal for the markets – a fast-paced, steep run. Now, after nearly a fourteen-week sprint, a well-deserved breather. But is this a breather, a consolidating period, or are we bound to nosedive again? According to Jim Reid, a Deutsche Bank strategist, the S&P 500 will revisit its March lows and the relentless selling pressure in the index will return before this bear market is truly over.
Bloomberg: U.S. and European stocks are destined to fall below March’s lows if bear-market history is any guide, according to Jim Reid, a strategist at Deutsche Bank AG.
Share prices tend to hit bottom “at extremely cheap levels” relative to earnings during so-called secular bear markets, Reid wrote five days ago in his first equity strategy report. Secular bears consist of multiple rallies and declines, with each slump producing lower valuations than the prior one.
The S&P 500 has climbed as much as 40% from its March 666 lows.