Jim Lebenthal: I believe we’re in a correction and not a bear market

Jim Lebenthal: I believe we’re in a correction and not a bear market

U.S. equities remain under pressure on Tuesday but Cerity Partners’ Jim Lebenthal is convinced the ongoing sell-off might just be a correction and not an all-out bear market.

Lebenthal’s remarks on CNBC’s ‘Halftime Report’

To begin with, Lebenthal says the plunge in the S&P 500 index doesn’t meet the technical definition of a bear market. This afternoon on CNBC’s ‘Halftime Report”, he said:

We’re close to the technical definition but we’re not there yet, which is down 20% in the S&P 500. Also, bear markets last a very long time while a correction, which is I believe we’re in right now, is over and done within a year.

The current market, Lebenthal added, looks more like the correction in 2015 and not the great financial crisis of 2008. SPX is down roughly 15% for the year at present.

CPI report on Wednesday in focus

The U.S. Bureau of Labour Statistics is scheduled to report inflation data for April on Wednesday, which, as per Lebenthal, will help settle the “correction versus bear market” debate. He noted:

The correction versus bear market teeters on the fulcrum of what inflation does. I’m a long-term investor but for the short-term call on whether we’re in a correction or is it going to get worse, the CPI report tomorrow is very important.

According to Lebenthal, a reading below 8.0% will likely relieve fears of a bear market. In the prior month, the U.S. CPI had climbed to about a forty-year high of 8.50%.

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Source: https://invezz.com/news/2022/05/10/jim-lebenthal-i-believe-were-in-a-correction-and-not-a-bear-market/