More Strategists Say a Storm Is Brewing in the U.S. Stock Market
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• ‘Global stock markets may be entering a period of turmoil’
• Calls for market volatility are growing louder on Wall Street
By Ksenia Galouchko and Joanna Ossinger
September 9, 2021, 10:59 PM EDT Updated on September 10, 2021, 7:54 AM EDT
Strategists from almost all the top Wall Street banks have come out this week with a nervous message about the U.S. stock market.
The latest views hail from Deutsche Bank AG and Goldman Sachs Group Inc., and echo earlier pronouncements from Morgan Stanley, Citigroup Inc. and Bank of America Corp.
While investment banks tend to be measured in their outlooks, there are common threads that underpin their predictions that the market is vulnerable. Valuations are at historical extremes, stocks have rallied non-stop for seven months, the economy looks soft and the Federal Reserve is preparing to taper stimulus.
“The risk that the correction is hard is growing,” wrote Deutsche Bank equity strategists including Binky Chadha. “Valuation corrections don’t always require market pullbacks, but they do constrain returns.”
September 11, 2021 at 8:11 PM #445014
September 11, 2021 at 8:55 PM #445025gordyflParticipant
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I don’t know. On the positive side, the US Dollar is still doing well against other currencies. Oil is stable. And most people are afraid to get out of the stock market fearing they will lose out on the easy money. They don’t want to sit on the sidelines watching their friends’ stocks go up, up, up.
On the negative side, interest rates are artificially low. There’s not much room to lower rates to stimulate the economy, if need be. Meanwhile, The Fed has been buying Treasury and corporate bonds, which can’t go on forever. Then there’s the usual government borrowing of over a trillion dollars a year. (Those tax cuts never did “pay for themselves”). There’s also the trade deficit. The US hasn’t had a trade surplus since 1975. Now I hear that student loans and credit card debt are at all-time highs. Add in car loans and mortgages. Then toss in the pandemic and its repercussions. The Stimulus checks have ended. A growing loss of jobs through technology. Then there could also be some surprises like we saw in the banking crisis of 2008.
I see shaky times ahead.
Sooner or later, something has got to give. When? No one knows for sure.
September 12, 2021 at 7:00 PM #445171Ohio BarbarianModerator
- Total Posts: 21,767
Something’s got to give because the whole stock market is this irrational pile of bets, propped up by this nonsensical MMT that only works while those with the money have faith that it will continue to work. As soon as it doesn’t, whenever that happens but it’s inevitable, there will be another stock market panic.
Capitalism, bringing financial panics to destroy livelihoods since 1634.
It is better to vote for what you want and not get it than to vote for what you don't want and get it.--Eugene Debs
You can jail a revolutionary, but you can't jail the revolution.--Fred Hampton
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