- The stock market may retest its June lows this autumn as earnings revisions roll in, said JPMorgan Asset Management's global strategy chief.
- "I'm sorry to say, but I do think we've got a little bit of a torrid autumn ahead of us," John Bilton told Bloomberg TV.
The stock market may retest its June lows this autumn as corporate earnings revisions roll in, according to John Bilton, JPMorgan Asset Management's head of global multiasset strategy.
The revision cycle has only just started, and half to two-thirds of earnings downgrades need to come in before the market finds a base, he said in an interview with Bloomberg TV.
"I'm sorry to say, but I do think we've got a little bit of a torrid autumn ahead of us with regards to stocks," Bilton warned.
In June, the S&P 500 finished off its worst first-half of the year since 1970 and slumped to the 3,778 level. Retesting that low would mean about 5% downside from yesterday's close at 3,955.
Bilton added that investor optimism this summer had been misleading markets — until Federal Reserve Chairman Jerome Powell said at Jackson Hole last week that the central bank would continue to hike rates in response to high inflation.
"This whole summer exuberance, it felt a little bit like the 'Mamma Mia' sort of dancing scene with markets just thinking 'this is getting better!' And then it's suddenly come downward with a bump following the Jackson Hole speech, and we've remembered the Fed has a job to keep inflation under control," Bilton said.
Analysts largely expect a rate hike of 50 to 75 basis points to be issued at the next Federal Open Markets Committee meeting in September 20-21.