Stocks may keep sliding until institutions join retail investors in capitulation, this firm says

We’re a day away from what could be the first half-point hike from the Federal Reserve in 22 years. Kicking a busy central bank week was the first rate increase since 2010 from Down Under.

During those “scares” — the 2010 European debt crisis, the 2011 U.S. debt downgrade, the earnings/industrial recession of 2015-16 and the late 2018 China trade war/quantitative tightening selloff — equity declines ranged from 14% to 20%, for an average drop of 17.7%. The pair are also keeping a close eye on weekly Commodity Futures Trading Commission data on asset manager positioning in U.S. equity futures. While signs of retail bearishness are everywhere, the institutional side isn’t quite there yet, they note. “And it may simply be that in order for the U.S. equity market to bottom, institutional investor sentiment needs to catch down to retail.”

Russia plans to annex large parts of Eastern Ukraine, a U.S. official has warned. And the EU is reportedly looking to Africa to help wean off Russian natural gas. The chart “Relative to the U.S. economy, the S&P 500 is still 28% more expense then it was at its 2000 bubble peak,” writes JonesTrading’s O’Rourke, who provides the below chart:

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Stocks Could Plunge Another 15% After Fed-Spurred Selloff—Will The Economy Fall Into Recession?One analyst worries inflation will force the Fed to hike rates 'until it hurts.' Experts weigh in on whether a recession is around the corner. Most American media are avoiding any recession reporting is a shame not preparing americans , just look at Amazon loose last week people can’t afford to keep buying Chinese junk
Fonte: Forbes - 🏆 394. / 53 Leggi di più »