On Wednesday, the three major U.S. stock indexes rose slightly, and European stock markets generally trended higher.
The recent rebound in the US stock market seems to have paused, with the Dow Jones and S&P 500 index falling for two consecutive days. However, thanks to the past five weeks of gains, the three major indexes are still expected to rise significantly by the end of this year.
Chris Senyek, Chief Investment Strategist at Wolfe Research, believes that investors will feel disappointed as the new year approaches. In his prediction, he expects the S&P 500 index to fall by 8% by the end of next year.
Senyek said, “We believe that the lagging impact of Fed rate hikes will truly begin to impact the economy in the first half of next year.” He stated that as inflation declines, companies will lose pricing power because they lose their ability to pass price pressures onto consumers.
Senyek also predicts that increased risk aversion and a slowdown in corporate profit growth will bring additional pressure on stocks next year.
Popular Chinese concept stocks in pre-market trading mostly rose: Netease and NIO were up more than 2%, while Li Auto, Baidu, and JD.com were up over 1%.