Monday, 31 July 2017

US stock market volatility at all-time lows amid “melt-up in earnings”

Many analysts are becoming nervous about the US stock market, according to a report by Joe Ciolli at Business Insider.

Ciolli quoted Marko Kolanovic, JPMorgan's global head of quantitative and derivatives strategy, as saying that all-time lows in market volatility “indicates that we may be very close to the turning point”.

Baupost Group was reported to have recently said that the lack of price swings is a possible “accelerant for the next financial crisis”.

Nevertheless, most analysts apparently do not see a major downturn in the market. Ciolli reported that a survey of 20 chief equity strategists conducted by Bloomberg showed an average year-end forecast of 2,439, basically unchanged from Friday's close.

And then, there are the bulls, like Edward Yardeni.

CNBC reported that Yardeni sees the recent record highs for the US stock market as being driven by “a melt-up in earnings”, which should be good for the rally.

“I think by the middle of next year we'll be looking at 2600-2700,” he said.

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