Wall Street pros are looking for some very specific factors to see if the brutal bear market for stocks is nearing an end.
The cooling inflation would mean a halt to the stock market damaging interest rate hikes from the Federal Reserve.
"I think the bear market can't end until inflation shows signs of moderate", said Nuveen Chief Investment Officer Saira Malik on Yahoo Finance Live. We need to see more consistent data, even though the Fed may not be talking about rate cuts at that point. On Thursday, markets closed out the worst first half of a year since 1970. The Dow Jones Industrial Average is off to its worst start since 1962.
I don't know that the bear market is over yet, according to Keith Lerner, Truist Co-Chief Investment Officer on Yahoo Finance Live. I think there is going to be a difference in the way we come out of this as compared to the last decade. If you look at the last decade, you had a lot of V-shaped recoveries for the market. The Federal Reserve had the market's back. Malik said that consumer spending leads to our key risk for the second half for equities. That's earnings and whether or not they're going to be the next shoe to drop. We think companies are worried about the second half of this year because of the weakening of the consumer, fears of a recession, and the fact that estimates really haven't come down. Follow Sozzi on Twitter, BrianSozzi, and LinkedIn.