Could the NASDAQ re-test the COVID lows of March 2020 when it sat around 6,900? Yes. That would require a prolonged recession (which we expect) AND The Fed not restarting its ultra-dovish monetary policy of Quantitative Easing combined with a near zero Fed Funds Rate. Who knows how the Fed will behave in 2H 2023 and 2024.
In addition, we would expect the rotation into Fixed Income assets to accelerate as Real Yields move closer to positive territory. High Yield issues are in positive Real Yield territory as they are 100 BPS or more over the 8% CPI depending upon the specific credit.