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The U.S. stock market put in an impressive reversal on Tuesday, but more selling lies ahead. Here’s why:
- Further signs of U.S. economic weakness will stoke deeper recession fears, sending stocks lower.
- Investor sentiment is dark but remains mixed. It has not turned bearish enough to be a contrarian buy signal.
The next big pain point will likely come on Friday, March 7, when investors get a fresh U.S. employment report. The good news is, there’s probably no recession coming. So this likely won’t turn into a full-fledged bear market, defined as a 20%-plus decline. A garden-variety S&P 500
SPX correction (down 10%) is more likely.
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