Saturday, 17 August 2019

Markets rise but “US stock market hasn’t hit correction low”

Markets rose on Friday.

The S&P 500 jumped 1.4 percent, the STOXX Europe 600 rose 1.2 percent and the Shanghai Composite rose 0.3 percent.

US economic data on Friday were mostly weak. The University of Michigan’s consumer sentiment survey fell to 92.1 in August from 98.4 in July. US housing starts fell 4 percent but building permits rose 8.4 percent.

European stocks were lifted by indications that the German government would allow deficit spending if necessary to combat a recession.

Meanwhile, Mark Hulbert at MarketWatch said that US stocks could fall further.

Hulbert noted that sentiment did not deteriorate enough during the recent market decline to build enough “wall of worry” among investors to support a tradable rally.

“The U.S. stock market hasn’t yet hit a correction low,” he wrote. “The bulls have begun to retreat, which is a step in the right direction. But contrarians are betting that more bulls will have to throw in the towel before a tradable bottom is at hand.”

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