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Original title: U.S. stocks have a peak signal!Wall Street Strategist: There are a lot of bubbles in the market, a callback is coming
News from the Financial Associated Press (Shanghai, editor Bian Chun), Although the new crown epidemic has made a comeback in various parts of the United States, US stocks have rebounded throughout the summer, frequently hitting record highs. After releasing the shocking non-farm payroll report on Friday, the Nasdaq reached a record closing high. It seems that no matter what happens, it can’t stop the rebound of US stocks, but Wall Street strategists have issued a warning.
“There are a lot of bubbles in the market right now, as we have seen at the top of other important markets, it will only become obvious after things happen,” Matt Ma, chief market strategist at Miller Tabak, a New York investment advisory firm. Lee (Matt Maley) said in an interview last Thursday.
Marley saw in the current market red flags similar to the period when the stock market peaked in 1999-2000 and 2007-2008. He pointed out that during the Internet bubble, regardless of fundamentals, stock prices have soared, just as AMC and GameStop have shown this year.
“We are in a very similar situation now,” Marley said. “You see meme stocks are soaring… they won’t change the world, but these stocks have risen by 2000% in just a few days, and the SPAC market is also crazy. The current stock market is very, very expensive and seriously overbought. .”
He said that the technology stocksNasdaqTake the 100 index as an example.The QQQ Nasdaq 100 ETF is currently 70% premium to its 200-week moving average, which is much higher than the level before the recent pullbacks.
Although Marley does not think there will be a crisis as serious as the first decade of this century, he said,Investors should remain cautious and adjust their strategies accordingly. He pointed out that this does not mean that investors have to sell everything, they can keep 50% of their cash, or even 20%, but if they hold a little more cash, they can buy stocks when the stock market pulls back and catch the stock market’s rebound. Chance.
It is worth noting that Julian Emanuel, the chief equity and derivatives strategist of the US investment bank BTIG, also warned at the end of August that a dangerous situation similar to the Internet bubble may be unfolding on Wall Street. He said that the record price trend in the market resembled the end of 1999, and there may be a 10% to 20% correction in the next month.
Two major catalysts for the market downturn
Gina Sanchez, chief market strategist at Lido Advisors and chief executive officer of Chantico Global, said investors should pay attention to catalysts that may cause the market to decline. She saw two potential triggers.
Sanchez said,The first catalyst is that we have included very strong growth expectations in our pricing. She said that this year’s GDP will indeed record huge growth, but next year will be lower than this year, although it will remain strong.
Like the GDP forecast, she said that due to the company’s strong performance in the past few quarters, future earnings growth may slow down. Although it will remain strong, there is room for disappointment.
She pointed out,The second and more important catalyst is when liquidity will begin to exit the market. When this happens, there may be a real correction in the market.
The Federal Reserve-one of the biggest sources of excess liquidity in the market-has already hinted that it may begin to reduce its bond purchase program before the end of the year. The next meeting of the Federal Reserve will be held on September 21 and 22.
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