Wednesday 10 June 2015

US stocks end flat but in “precarious position”

The US stock market ended its losing streak on Tuesday with the S&P 500 closing flat.

However, European stocks declined for a sixth straight day on Tuesday, with the STOXX Europe 600 falling 0.4 percent. Emerging markets fell for the 12th consecutive day, the longest losing streak in 25 years.

Bonds also fell on Tuesday with the yields on US, German and UK 10-year government bonds all rising to the highest in months.

While the US stock market managed to avoid losses on Tuesday, Robert Prechter, president of Elliott Wave International, says that the US bull market is in a “precarious position”. With sentiment at extreme optimism but momentum and breadth of advance waning 6.25 years into the bull market, Prechter thinks that “the stock market is at high risk of a sharp collapse”.

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