The stock market undoubtedly is on the backfoot, with multiple risks clouding the outlook for the near- to medium-term. Analysts are not very optimistic about a reversal anytime soon despite the oversold conditions.
Loup Funds co-founder and prominent Apple, Inc. (NASDAQ:AAPL) and Tesla Inc. (NASDAQ:TSLA) analyst Gene Munster echoed a similar sentiment in a tweet on Monday.
"I believe we were in a bubble," Munster said. The current sell-off, therefore, reflects more than the current uncertainties such as the Fed's interest rate hikes, inflation and geopolitical factors, the analyst said.
The S&P 500 Index was on a broader uptrend from late March 2020 to the start of 2022 before the confluence of negative catalysts began to drag stocks lower.
The nearly two-year old bull market has taken valuations sharply higher, questioning the sustainability of these. Munster suggests that more downside is likely. He premised his view on the fact that the Nasdaq Composite Index is still higher on a two-year basis.
"I wish I had better news but the fact the Nasdaq is still up 28% over the past two years suggests there's more downside," the analyst said.
The SPDR S&P 500 ETF Trust (NYSE:SPY) ended Monday's session down 3.20% at $398.17, according to Benzinga Pro data.
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