“Sentiment is negative, but we still didn’t see a flush. We almost needed to see at least a break of these lows to see some more fear in the market, more stop levels triggered,” said Keith Lerner, co-CIO at Truist Advisory Services.
“In some ways, as much as most technicians want to see support held, in my view you almost need to see that [break] to get a more durable bottom.”
Tech stocks were the worst performers in April, but the group led the late comeback on Monday. Netflix and Facebook-parent Meta Platforms rose by about 4.8% and 5.3%, respectively. Microsoft and Google-parent Alphabet gained more than 2% each.
“With inflation so high and earnings growth slowing rapidly, stocks no longer provide the inflation hedge many investors are counting on. Real earnings yield tends to lead real stock returns on a y/y basis by about 6 months. It suggests we have a meaningful downside at the index level as investors figure this out,” Morgan Stanley equity strategist Michael Wilson said in a note to clients.
