According to Bloomberg, analyst Barry Bannister predicts more severe inflation than previously expected. “I would say there’s a decent risk of a January 2024 recession. I think inflation is stuck with us for a while at a higher level than it used to be,” he stressed. Who is Barry Bannister and why should traders take notice of his warnings?
Barry Bannister was one of only a handful of Wall Street forecasters who accurately predicted a rally on Wall Street at the start of 2023.
The S&P 500’s surge has caught many investors off-guard, exceeding even Bannister’s bullish forecast of 4,300 points by mid-year.
In early 2023, many analysts were worried about a recession and expected a rough first half of the year. However, later, they assumed that the situation would normalize in the second half of 2023. Stock markets were projected to recover amid less aggressive tightening by the Fed.
However, many analysts were surprised by how resilient the US economy turned out to be. Apart from that, corporate profits grew considerably despite market woes. Last but not least, the AI boom also served as a driving force for equities.
The S&P 500 ended up rallying by 16% in the first half of the year, logging the largest gains for the period since 2019.
Bannister is bullish on the industrial, material, financial, and transport sectors. They could climb in the second half, shifting focus away from Big Tech. “What we are doing is betting on equal weight outperforming cap-weight S&P, and cyclical value outperforming cyclical growth,” Bannister said.
