Friday, 21 December 2018

Markets fall, “investors lose all hope”

Markets fell on Thursday.

The S&P 500 plunged 1.6 percent, the STOXX Europe 600 tumbled 1.5 percent and the Nikkei 225 dived 2.8 percent.

“Investors have lost all hope as Powell was really the last opportunity in ’18 that could possibly trigger an uptick in willingness to put risk back on,” wrote Joel Kulina, an analyst with Wedbush Securities, in a note.

Indeed, many analysts expect further declines for stocks.

Julian Emanuel, chief equity and derivatives strategist at BTIG, said: “It is entirely possible that looking out over the next three to six moths this correction turns into what you would call a bear market because of the fact that the Fed really didn't show sufficient sensitivity to the affect of policy tightening on the speed of asset price changes to the downside.”

“We already have rates that are high enough to push us into at least a growth recession,” said Ed Keon, QMA chief investment strategist and portfolio manager.

Still, some remain hopeful of a rebound next year.

“I still expect a positive year next year, but maybe something like 5 percent,” said Keon.

Michael Arone, chief investment strategist at State Street Global Advisors, said “fundamentals will support reasonably high stock prices in 2019”.

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