Markets are heading into a 'post-Fed' world. Here are 4 things that will drive the new investment regime
"reminds us that investors overweight the fear of loss," said Colas."Having been hurt by last year's market action, they will likely remain skittish even as we move into a new investment paradigm." 1) Earnings will become more criticalDespite the Fed's string of big rate hikes, corporate profits remain very strong, said Colas, keeping the S&P 500 closer to 4,000 instead of 3,000.
In fact, S&P 500 companies should earn $50 a share in the first quarter of 2023, which would be 22% more than its pre-pandemic quarterly run rate in 2018-2019. And for the year, S&P 500 earnings are likely come down by about 10% to a still-healthy $200 per share, according to DataTrek.Sectors and stocks have already started moving more independently of each other, which reduces overall market price volatility, said Colas. That's why investors were seeing Wall Street's so-called fear gauge, theThe index has come off this year's peak above 26.
Dollar strength tends to hurt revenue made in international markets by US companies, and the value of their international sales is cut when converted back to dollars. Colas said the transition to a post-Fed investment landscape will take several more months - at least. In the meantime, DataTrek noted the
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