Choppiness will rule market through next month, Art Hogan predicts

The trading week may have started well, but a bull warns investors shouldn’t feel too comfortable with more turmoil ahead in the near term.

National Securities’ Art Hogan predicts it will affect everything from stocks to Bitcoin to SPACs by the end of June.

“The month of May and certainly the month of June will likely be very similar in their patterns: choppiness during the day but flat at the end of the month,” the company’s chief market strategist told CNBC’s “Trading Nation” on Monday.

Despite the wild swings, Hogan notes that the stock market has held up pretty well. The Dow is up about 2% this month, the S&P 500 is virtually unchanged, and the tech-heavy Nasdaq is down 2%.

“It was basically flat,” he said. “This apartment is probably a good thing because we have been very volatile.”

Hogan cites fluctuations in inflation as the main reason for the sharp moves.

“Whenever we get the most volatility, it appears to be inflation reports – whether it was CPI that got hot a few weeks ago [and] the PPI, “said Hogan.” This week we’re getting them [core] PCE. “

He also says stretched valuations and speculative excesses on reopening trades, technology, SPACs, EV and crypto are contributing to the wild swings. Hogan believes the adjustments are critical because the assets moved so quickly and so quickly.

And now there can be a light at the end of the tunnel.

“If we start this week and leave the month we’ll be in a better place in terms of ratings,” he said. “Foam has peeled off the top, but I think we’ll be entering a better place and on a firmer footing next month, at least on a rating basis.”

“Green light to come back on the market”

Currently, Hogan believes it is a stock picker market. He advocates having equal parts cyclicals and growth in a long-term portfolio and would avoid aggressive trades – even if risk-weighted assets were to falter again.

“Once we have a better grip on the direction of inflation, which is what some of the inflation numbers look like from month to month, and if we don’t see massive increases I think this will be a green light to that.” come back on the market, “added Hogan.

Fast-forwarding to the end of the year, he predicts that the S&P 500 is likely to surpass its official year-end target of 4,300. He released it earlier in the year and it was based on an S&P EPS earnings estimate of around $ 186.

“I suspect the consensus estimates will now be in the 190s, $ 191.192,” Hogan said. “If we use the same multiple, we’ll get to 4,400, and we’ll probably have to do that next week.”

The index closed at 4,197.05 on Monday.

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