So much for Dow 20,000…
The Dow Jones Industrial Average pulled back 400 points Friday on fears the Federal Reserve could raise rates at its September 2016 meeting, and on fears that OPEC talks could again fail later this month.
Even Goldman Sachs is bearish on the market. In fact, the bank now anticipates that a rise in political uncertainty could translate into a low market earnings multiple. The bank also believes U.S. economic data has been disappointing, as labor reports, retail sales and ISM manufacturing non non-manufacturing numbers disappointed.
While both are true, neither has kept the markets from reaching all-time highs.
As long as the Fed continued to keep rates at historic lows with further hopes for stimulus, markets marched higher anyway. Pull that stimulus and hope, as the Fed is threatening to do with higher rates, and we have reason to be bearish.
However, that won’t keep us from uncovering undervalued opportunities.