Monday, 10 September 2018

Stocks in “danger zone” or “extended meltup”?

The S&P 500 declined 1 percent last week, falling on all four trading days.

MarketWatch reported that Barry Bannister, head of institutional equity strategy at Stifel, wrote in a note that stocks are in “the danger zone” and that a bear market “within 6-12 months seems assured”.

According to Bannister, rising interest rates would be the catalyst for the bear market.

However, other analysts remain bullish.

Ed Yardeni, president of Yardeni Research Inc, told MarketWatch that “the market is still in the midst of an extended meltup”.

According to Yardeni, strong corporate earnings should help the market overcome concerns over the trade war and emerging markets.

Blackstone's investment strategist Joseph Zidle thinks there is a high probability the S&P 500 will break through 3,000 within the next couple of months, noting that “the fundamentals here are strong”.

B. Riley FBR's Arthur Hogan also sees further gains for the S&P 500. “I think technology will significantly outperform and probably be the lead sector in the S&P 500,” he said.

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