The S & P 500 has performed well so far this year, almost unaffected, but at least one strategist believes investors are likely to be hit.

Zhitong Finance learned that last week, the index rose by nearly 1%.120freespinsforrealmoney.9%, the total increase in May reached 3.7%, which basically erased the loss in April and was only 0.6% short of the highest point of the year on March 28. The s & p 500 has risen nearly 10% so far in 2024.

Therefore, it is fair to say that the bulls have the upper hand and the market has every reason to be optimistic. However, there are still some cautious voices.120freespinsforrealmoneyThey think the road ahead may be much more rugged than investors are used to now.

Barry Bannister, chief equity strategist at Stifel, is one such person. Bannister has long doubted whether the market can continue to rise under the influence of headwinds such as high interest rates. His forecasts have been accurate many times in the past, especially about the S & P 500 last year and the timing of the Fed's rate cut, which is unlikely in the first half of this year.

Even so, the market did not rise as slowly as he had expected.

In a report released on Monday, Bannister pointed out that this does not mean120freespinsforrealmoneyWe're safe. He expects the S & P; to fall to about 4750 in the second or third quarter, down more than 9 per cent from Friday's close of 5222.

While many strategists are discussing the debate between a soft landing and no landing, or trying to predict a recession, Bannister believes that about five quarters from early 2022 to mid-2023 is a "pseudo-recession".

Given the sharp rebound in the market since then, investors may be eager to see it as a thing of the past. The problem, according to Bannister, is that if this is really the case-there is a quasi-recession-then the Fed's progress on inflation is actually all the normal post-recession deflation we expect.

In other words, most of the heavy work during the recession has been done, and given that interest rates are already high, the Fed has virtually no means to bring inflation down to its 2 per cent target, which Bannister calls a "pipe dream".

Overall, Bannister believes that inflation will be a persistent problem, which will hinder the Fed's ability to lower interest rates. Without this expected outcome, it will be difficult for the market to reconcile its expectations for looser monetary policy with the reality, resulting in losses in this quarter or the next quarter.

So far, the market has been able to ignore the constant postponement of the timetable for interest rate cuts. Even bulls are delaying their hopes, as can be seen from Morgan Stanley economist Diego Ansoatjee reiterating on Monday that his team believes the Fed will cut interest rates three times this year, but they expect the first rate cut to take place in September, not in July as previously predicted.

The hope of cutting interest rates is still there, tempting and out of reach. The question is, how long can this hope support the market?120freespinsforrealmoney?