Tony Dwyer Says There’s No Point Making S&P 500 Calls Right Now
Tony Dwyer Says There’s No Point Making S&P 500 Calls Right Now
(Bloomberg) -- Forecasting the stock market has become mission impossible for Tony Dwyer.
With the coronavirus outbreaking leaving uncertainty everywhere, the chief market strategist at Canaccord Genuity LLC has suspended his year-end price-target of 3,440 for the S&P 500.
“We don’t believe you can come up with a rational operating EPS estimate, not just because of the negative economic shutdown, but because the positive monetary and fiscal response is as historic as the negative,” Dwyer wrote in a note to clients. “Until we see some way to figure out the EPS, we are going to base our financial market plan on human nature, which means we only know there has been an initial panic low after we have seen more than a one- or two-day bounce.”
Companies from Apple Inc. to Microsoft Corp. and Mastercard Inc. have slashed their financial guidance, citing the virus outbreak. At the same time, while the Federal Reserve unexpectedly cut its benchmark interest rate to near zero, the Senate has yet to send President Donald Trump a bill passed by the House to help Americans deal with the outbreak.
The S&P 500 resumed its plunge Monday, sinking as much as 11.4% as investors fled risk assets. The benchmark has plunged almost 30% from a February high, falling into a bear market at the fastest pace ever.
“For the time being, the market is likely to move based on human nature rather than fundamental data,” Dwyer wrote. “In our view, we are in the tail end of the panic phase of the crash, which sets the stage to start the relief phase of the intermediate-term bottoming process over coming sessions. Unfortunately, we cannot forget the demoralization phase is still likely ahead of us.”
To contact the reporter on this story: Lu Wang in New York at lwang8@bloomberg.net
To contact the editors responsible for this story: Courtney Dentch at cdentch1@bloomberg.net, Chris Nagi
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