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Technicals suggest the S&P 500 could jump 30% in a current bull market cycle that will extend to 2022, Fundstrat says

Technicals suggest the S&P 500 could jump 30% in a current bull market cycle that will extend to 2022, Fundstrat says

NYSE trader
  • The S&P 500 could surge 30% from Monday’s close to 4,600 in a bull market cycle that extends into 2022, according to a technical analysis note from Fundstrat.
  • The cycle backdrop for stocks remains bullish and is still improving, market breadth is expanding, and the laggards are bottoming, the note highlighted.
  • “We would encourage investors to keep in mind the improving longer-term cycle backdrop underway that should support equities well into 2021,” Fundstrat said.
  • Visit Business Insider’s homepage for more stories. 

The stock market should continue its run for at least another two years, according to a technical analysis note from Fundstrat sent to clients on Tuesday.

Specifically, monthly cycle indicators point to a continued uptrend that is supportive of the S&P 500 rising to 4,400 to 4,600, representing potential upside of 25% to 30% from Monday’s close, respectively. 

“Our long-term monthly quadrant balance oscillator, tracking 2-4 year market cycles, continues to build positively from oversold levels signaling the current cycle likely has room to run into 2022,” Fundstrat analyst Rob Sluymer said.

The percentage of stocks in the S&P 500 with rising monthly momentum continues to rise from its COVID-19 low in March, and has plenty of upside left. This supports Fundstrat’s view that a new four-year cycle bull market “is still in the early stages of developing,” the note said.

On top of that, other bullish technical indicators are building a more supportive picture for stocks longer term.

Read more: Good deals in pandemic-hit companies are proving hard to find. Here’s how big investors that raised billions to pounce on corporate distress are changing up their playbooks.

New cycle highs in the outperformance of the S&P 500 relative to the US Barclay’s Aggregate Bond Index lead Fundstrat to continue recommending clients overweight equities relative

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Here’s what Florida insurance experts say about the current cost crisis

Here’s what Florida insurance experts say about the current cost crisis

As home insurance prices are poised to increase sharply, the South Florida Sun Sentinel asked leading insurance experts to provide their views of the disintegrating state of the market. Here’s what they had to say. Responses have been edited for length and clarity.

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Locke Burt, president and CEO, Security First Insurance Co.

Insurance cost drivers are well known and have been reported before — bad weather, increased reinsurance costs, shady contractors, aggressive plaintiffs bar with a favorable legal environment, water losses, fraud. What’s different is the trends seem to be accelerating and the Legislature has not done anything meaningful to change the trajectory of increased costs which, under Florida law, must be passed on to consumers in the required annual rate filings.

The private sector is shrinking and raising rates as fast as they can because the losses are not sustainable and the providers of additional investment capital simply do not believe that the situation in Florida is going to improve for several years. That’s why the public companies are selling for 50 cents on the dollar.

This situation won’t change until legislators hear from their constituents and decide to do something, the weather improves, or the lawyers disappear.

Travis Miller, insurance regulatory attorney, Radey Law

In Florida, we face unique but foreseeable challenges due to our substantial coastal exposures and the corresponding hurricane risk. Insurers anticipate these challenges and typically are well prepared to meet them. However, these challenges have been compounded in recent years by other issues that are not meteorological but instead are behavioral. Simply put, loss experience in Florida has deteriorated to a point historically unseen in this state and significantly worse than in other states following similar events.

The conditions in the current market just reflect how these concerns manifest over time if

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Years of low interest rates made the current economic crisis worse, Fed’s Rosengren says

Years of low interest rates made the current economic crisis worse, Fed’s Rosengren says

  • Boston Fed President Eric Rosengren said years of low interest rates that encouraged risk-taking are making the current economic downturn worse.
  • He specifically cited “low rates persisting for an extended period even after the economy has made progress in the recovery” that can create problems.



Eric S. Rosengren wearing a suit and tie smiling and looking at the camera: The Federal Reserve Bank of Boston's President and CEO Eric S. Rosengren


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The Federal Reserve Bank of Boston’s President and CEO Eric S. Rosengren

Years of low interest rates led to excessive risk taking in commercial real estate and will make the current economic downturn even more severe, Boston Federal Reserve President Eric Rosengren said Thursday.

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The central bank official said he expects a wave of defaults and bankruptcies to hit that will aggravate an unemployment problem that has hit lower-wage workers disproportionately.

Regulatory authorities, he added, should have been able to see conditions building up that would make any unexpected crisis worse.

“Clearly a deadly pandemic was bound to badly impact the economy,” Rosengren said. “However, I am sorry to say that the slow build-up of risk in the low-interest-rate environment that preceded the current recession likely will make the economic recovery from the pandemic more difficult.”

The Fed has been at the center of the coronavirus pandemic crisis response, slashing already-low interest rates and implementing a slew of programs to ensure market functioning and lend money to areas of the economy in need.

In recent days, it has adapted an even more dovish approach to monetary policy, pledging not to raise rates even if inflation runs above the Fed’s preferred 2% target.

Former Goldman Sachs CEO Lloyd Blankfein on monetary policy

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A loose Fed also often finds itself the target during times of excess, like the financial crisis and the dotcom bubble. Rosengren’s remarks reflected concern about the consequences of the low rates that

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