Financial Sense(R) Newshour Recession or Recovery? Craig Johnson on What’s Next for the Markets
Apr 11, 2025
Craig Johnson, Chief Market Technician at Piper Sandler, dives into the rollercoaster of today's market. He discusses recent market surges and explores whether we're heading towards recession or recovery. Johnson highlights high dividend yields in the electric utility sector and strategies for steady income. He addresses the challenges of national debt and trade dynamics, while emphasizing the significance of sector rotations in recovery. With a year-end target of 6,600, he inspires cautious optimism during these turbulent times.
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Market Washout Lows Signal Opportunity
- Extreme lows in stocks above their 40-week average signal potential market bottoms.
- Historical data shows high probability for positive returns 26 and 52 weeks after such lows.
Rare Big Market Bounce Example
- Market rebounds above 7% in a day are rare but occurred notably in 2020 during Fed rate cuts.
- Such spikes often follow decisive policy actions like rapid monetary easing.
Policy-Driven Bear Market Insight
- The current bear market is driven by trade policy, differing from past credit or virus-driven downturns.
- Policy changes could reverse market declines, suggesting a potentially shorter bear phase.