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Wednesday, May 18, 2022

Despite rate of interest hikes, Canaccord's Tony Dwyer predicts a pointy market bounce

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While Wall Street braces for a half level rate of interest hike on Wednesday, Canaccord Genuity’s Tony Dwyer sees the elements for a pointy market bounce.

However, it is unrelated to a elementary change in financial and market dangers. So, traders might want to withstand going all in.

“We are going to get an oversold bounce. Sentiment and my tactical indicators are about as bad as they get,” the agency’s chief market strategist advised CNBC’s “Fast Money” on Tuesday.

According to Dwyer, the rally ought to materialize this summer season. He expects the S&P 500 to leap at the least 5%. Right now, the index is 13% beneath its all-time excessive hit on Jan. 4.

‘What’s accomplished the worst might bounce’

In preparation for a summer season increase, Dwyer believes traders might begin nibbling on the yr’s laggards. He speculates expertise, financials and client discretionary are positioned to seize the most important upside.

“What’s done the worst could bounce,” he famous.

But Dwyer warns the features will probably be non permanent.

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Even although he isn’t within the recession camp proper now, he predicts aggressive Federal Reserve tightening paired with a decelerating economic system this fall will contribute to contemporary market swings.

On “Fast Money” in late March, Dwyer warned traders the “Fed is in a box.” He nonetheless calls it an issue, particularly as cash availability dwindles and inflation persists.

“How we go into the end of the year is going to depend on what the Fed does,” Dwyer mentioned.

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