Stock market overbought, experiencing minor selloff: Yardeni

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Stock market overbought, experiencing minor selloff: Yardeni

The S&P 500 pulled back nearly 3% since reaching a new record high of 5,667.20 on July 16, mainly due to news that the Biden administration is considering stringent measures to restrict foreign companies from selling chipmaking machinery to China.

“We agree, but we also think that could be a one-and-done rate cut for 2024 because the economy remains resilient,” analysts at Yardeni Research commented. On July 16, the S&P 500 was 15% above its 200-day moving average, a level historically associated with subsequent selloffs. These selloffs typically result in 10%-20% corrections when recession fears do not materialize, and more severe bear markets when they do.

The research firm also pointed out business and investing columnist Michael Brush’s comments on insider buying activity, noting that it remains light due to earnings season lockdowns.

 

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