'Entering the danger zone': One Wall Street expert lays out a compelling case for a stock-market meltdown in May

  • 📰 BusinessInsider
  • ⏱ Reading Time:
  • 58 sec. here
  • 2 min. at publisher
  • 📊 Quality Score:
  • News: 27%
  • Publisher: 51%

Malaysia News News

Malaysia Malaysia Latest News,Malaysia Malaysia Headlines

Vincent Deluard, a macro strategist at INTL FCStone, says stocks will see a deep sell-off in May. He breaks down four main pieces of evidence.

macro strategist — who regularly publishes thoughtful research on a wide range of topics — thinks the bottom may drop out of the marketThat may seem like an aggressive forecast give the tight time frame, but Deluard lays out a compelling four-part argument to support his near-term bearish view. If his overall take had to be summarized into a single theme, it's that the drivers supporting stock strength will soon be impediments.

"To the extent that stock market seasonality does exist, it will stop supporting stock prices at the end of the month," he said in a recent report."Since 1973, stocks have tended to flat line from mid-May to the end of November."A great deal of recent stock-market punditry has focused on a so-called melt-up. While such an occurrence does push equities higher, it's usually viewed as a late-cycle indicator — a last-gasp effort for traders to ride the momentum wave higher.

Once again, the point of comparison is January 2018, ahead of the February meltdown. Deluard highlights the fact that conditions might be even more ripe for a correction this time around because there's less earnings growth expected for US corporations. He continued:"The combination of elevated valuations and poorer earnings growth prospects could trigger a larger correction this time. The stock market will be especially vulnerable to a correction as multiples are entering the danger zone."Upon first glance, the lack of shorts in the US equity market may seem like a bullish signal. But it's actually the opposite.

 

Thank you for your comment. Your comment will be published after being reviewed.
Please try again later.

Lol!

We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

 /  🏆 729. in MY

Malaysia Malaysia Latest News, Malaysia Malaysia Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

CNN Business Now - CNN VideoTonight's business headlines: ▪ Nasdaq closes at record high ▪ US unemployment falls to lowest level in 50 years ▪ Trump admin urges fed to cut rates ▪ Buffett's Berkshire Hathaway buys Amazon stock ▪ Britons to keep spending their copper coins IQ45 is gonna be so butt hurt in the morning. I can’t wait for his stupid tweets! 😂💩😂💩😂💩😂 Market and economy soars. CNN: Snore. Nothing to see here. Market suffers losses. CNN: EXTRA, EXTRA, READ ALL ABOUT IT! Don't worry it will be back up tomorrow
Source: CNN - 🏆 4. / 95 Read more »