The historic rise of US equities is about investors’ belief in Uncle Sam, according to an analyst from investment bank Morgan Stanley. “This year has been a story of how well America has done,” analyst Ruchir Sharma told CNBC. He described the recent rise in the US economy as “American exceptionalism.” Read more “We may or may not believe in [American exceptionalism], but the financial markets have never believed in it to such an extent,” he said. The analyst was referring to the 3.5-percent growth in the US economy for the first nine months of 2018, which is reflected in the “very richly valued” US financial markets. According to Sharma, the last decade has widened the ‘huge gap’ between the US and emerging markets. Other analysts have noted that the US contribution to the global economy is overestimated. The US share of global GDP now stands at 18 percent, a significant slide from the 30 percent seen after World … [Read more...] about US stock market rally all about ‘American exceptionalism’ – Morgan Stanley
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Could the bull market be over, and a stock market crash be imminent? In late April the Dow Jones Industrial Average sank more than 420 points, just under two percent, which leads some experts to claim that stocks have peaked. In addition, as US bond yields reached 3%, funds will slowly crawl into safe investments, leaving the stock markets with a shortage. Similarities between now and the pre-2008 financial crash were drawn but others have pointed to the near-record nine-year bull run the stock market has just experienced. What Causes Crashes? All of the famous US stock market crashes that occurred in 1929, 1987 and most recently in 2008 followed a similar formula. A new financial instrument or contraption creates a false sense of security, overinvestment causes a bubble, something happens where investors realize they made a mistake, sell quickly and the market crashes. However, if it was this simple then surely, we’d be able to predict when the next crash might happen? Yet … [Read more...] about How Close are We to a Stock Market Crash?
Following Jim Roger’s latest prediction of the “biggest crash in our lifetimes,” famed 81-year-old investor Mark Mobius says the US stock market is set for a huge correction that would be trouble for everyone. “I can see a 30 percent drop. The market looks to me to be waiting for a trigger to tumble,” Mobius said, as quoted by the London-based Financial News. According to Mobius, the former executive chairman at Templeton Emerging Markets, all the indicators now point to a great fall in the S&P 500 and the Dow Jones. “The consumer confidence is at all-time high in the US, and it’s not a good sign,” he said. “The market looks to me to be waiting for a trigger that will cause it to tumble. “You can’t predict what that event might be – perhaps a natural disaster or war with North Korea,” he said, stressing that a fall in the US market would mean trouble for everyone. The veteran investor, who predicted the … [Read more...] about Huge stock market collapse is coming – investment guru Mark Mobius
US stock markets are currently passing through the same peaks they faced 11 years ago, right before the massive sell-off that triggered the 2008 financial crisis, according to Phil Town, who sold his stocks before the crash. “I think we are right on the brink. The logic is pretty straightforward from a fundamental point of view, we are at a relationship between the Wilshire GDP ratio which is almost unprecedented historically, where we have a relationship that is historically the Wilshire's 70 to a 100 percent value of GDP,” the investor told The Street. The Wilshire 5000 is an index that consists of all the stocks that are actively traded in the United States. Following the dot-com bubble of the late 1990s, Warren Buffett introduced the ratio of the Wilshire 5000 full-cap index to the US GDP as a measure to evaluate the American economy's overall valuation. “So if GDP is at $20 billion or at $18 billion, that’s a descent market price. Today we are at … [Read more...] about Stock markets ‘right on the brink’ of 50% crash, financial expert warns
U.S. stocks closed lower on Wednesday as investors assessed rising geopolitical tensions Major indexes came under pressure in early trade after tweets from President Donald Trump suggested he was preparing for a military strike in Syria and underlined a tense relationship with Russia. Talk of a strike has been simmering since a suspected Assad-led chemical-weapons attack killed civilians in the rebel-held town of Douma over the weekend. But it could draw the U.S. into a conflict with Russia, in particular, which backs the Assad regime. The Dow Jones fell 0.9%, to 24,189.45, with 26 of its 30 components finishing in negative territory. The S&P 500 declined 0.6%, to 2,642.19, with nine of its 11 main sectors ending lower. Telecoms and financials led the losses, falling more than 1%.The Nasdaq Composite Index closed 25.27 points, or 0.4%, lower at 7,069.03. Tesco beats annual profit expectations Tesco Plc’s fresh food and prepared dishes helped the U.K.’s biggest … [Read more...] about US Stock Market ends lower as geopolitical tension rises