Via a note from Kolanovic on Monday, saying the slide in U.S. stocks is likely to continue, citing growing risks to the macroeconomy, including:
- rising Treasury yields
- strong US dollar
- high oil prices
And:
- complacency around stock market valuations
- inflation remains hot
- lower expectations for an imminent Fed rate cut
- overly optimistic earnings outlook
Seeing some temporary stability this week due to earnings results.
“The correction is probably still far from complete”
- “Market concentration has been very high and positioning extensive, which is usually a red flag, at risk of reversing”
- The current market narrative is very similar to last summer in the United States, when unexpected rises in inflation and hawkish Fed revisions triggered a decline in risk assets.
- investor positioning now seems higher
- “The multiple expansion seen in recent months, extremely low volatility measures until recently, the tightest credit spreads since 2007, and the general failure of market participants earlier in the year to identify potential negative catalysts for stocks are starting to change.”
S&P 500 daily chart:
cnbctv18-forexlive
