The stock market is about to drop as the retail FOMO trade fades away

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The retail trading frenzy that sparked a FOMO trade this year may be about to slow, and that's bad news for the stock market

Retail investors are buying the dips in stocks even as concerns about elevated inflation, higher for longer interest rates, and geopolitical tensions linger.

"Seasonality ahead of tax season suggests that flows into US markets will begin to decelerate," Vanda said in a recent note."[The]. That's because... in April, selling generally occurs across all securities, implying that investors hold back their investments to build cash to pay their tax liabilities." its dependence on individual investors,

 

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