Friday, 8 December 2017

Markets rise but vulnerable to sell-off

Markets were mostly higher on Thursday.

The S&P 500 rose 0.3 percent, the Nikkei 225 jumped 1.4 percent while the STOXX Europe 600 was flat.

As the S&P 500 snapped a four-session losing streak, Bank of America's Stephen Suttmeier said that “the market's going to follow that traditional December pattern, where you're sort of weak in the first half of the month and then have that Santa Claus rally in the back half”.

However, Byron Wien, vice chairman of Blackstone's Private Wealth Solutions group, said that the market “is overbought and investors are optimistic”, which leaves it vulnerable to a sell-off. “A 10 percent correction could come along at any time,” he said.

Still, Wien thinks that fundamental “are very strong” and that a bear market is not imminent.

In contrast, John Mauldin, president of Mauldin Solutions, thinks that there is overwhelming evidence that the US stock market is heading for disaster.

“In 2018, a lot of chickens are going to come home to roost in Washington, on Wall Street, and in the media centers of New York City and Los Angeles,” he wrote. “I personally think the bubble in high-yield debt, accompanied by so much covenant-lite offerings, will be the source of the next true liquidity crisis.”

No comments:

Post a comment