The S&P 500 fell 2 percent last week. Worries over a potential trade war after President Donald Trump said that he would impose tariffs on steel and aluminum imports added to ongoing concerns over inflation and higher interest rates.
The decline in US stocks came after two weeks of rebound over which the S&P 500 rose 4.9 percent.
Indeed, the S&P 500 had started last week positively, jumping 1.2 percent on Monday to come within 3.25 percent of its 52-week intraday high.
That rebound, however, had not been enough to convince some analysts that the pullback in stocks is over.
Matt Maley, equity strategist at Miller Tabak, wrote on CNBC early last week that the “bounce has been nothing more than what we typically see on the heels of a miniature 'crash'”.
John Hussman, president of Hussman Investment Trust, said in his monthly commentary later in the week that in the initial break from a speculative bubble, “the first leg down tends to be extremely steep, and a subsequent bounce encourages investors to believe that the worst is over”.
However, Hussman said that market internals are unfavourable and with market conditions “overvalued, overbought, overbullish”, expects the S&P 500 “to lose about two-thirds of its value over the completion of the current market cycle”.
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