Based on stock market indicators, the recent rally in the U.S. is likely to indicate a sustained move higher. A majority of investors are less resolute, expecting signs of lower inflation.
Despite some signs of a bottom, the markets have yet to show whether further declines are possible, as Ed Clissold, director of strategy at Ned Davis Research noted.
Analysts at Bank of America Global Research conducted a monthly survey among U.S. fund managers. Investor sentiment indicators, including the mentioned survey, show the highest level of pessimism over the past few years.
Morgan Stanley strategist Michael Wilson has been bearish on U.S. stocks through 2022. He said this week that a trading rally is possible with the S&P 500 rising to the 4000.
A prerequisite for markets to bottom is monetary easing over the next 6 to 12 months, analysts at UBS Global Wealth Management mentioned. A decline in economic activity, or a "bearish scenario" in the U.S. market, being the most credible tool for investors, are also needed. However, according to experts, the listed conditions are still not met.