STOCK MARKET FORECAST S&P 500, DOW JONES, NASDAQ, TARGET, RECORD, HIGHS, DESPITE THE sharp increase in UNEMPLOYMENT, AND CHINA, the ESCALATION OF THE TENSION THAT FLOYD PROTESTS TURN TO RIOT
- Stock prices have rebounded handsomely since mid-March as the S&P 500, Dow Jones and the Nasdaq Composite to decline sharply back towards the summit
- The Market sentiment seems to be just shy or a complete euphoria as an investor complacency swells in response to the FOMC safety net, and the hope of a V-shape economic recovery
- Bullish investors are blindly neglecting the threats of the us-China escalation of the tension, two-digit unemployment rates still rising, and Floyd protests, turning into riots
The stocks in the S&P 500, Dow Jones and Nasdaq have ripped higher by about 35% since the lows of mid-March. The relentless stock-buying bonanza in recent weeks has propelled the popular AMERICAN reference shares are within striking distance of their highs notched earlier this year.
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For example, the tech-heavy Nasdaq index is now only 1.3% of its December 18, 2020, to close at 9,720 level of prices, after a stunning reversal of one of the strongest on the stock market sale in modern history. This compares to an equally impressive, but not as strong, bounce-notched by the S&P 500 and the Dow Jones, the trade in which is about 9%, and 13% below their record level, respectively.
THE S&P 500 PRICE CHART WITH THE DOW JONES, THE NASDAQ, The INDEX OVERLAID: The STOCK market INDEX PERFORMANCE (as AT 31 DECEMBER 2019 as AT 01 DECEMBER 2020)
An unprecedented amount of central bank liquidity and government stimulus have flooded the markets consolidate the feelings and fight against the economic consequences of the corona virus of the pandemic. A the enlargement of the FOMC arsenal, such as the Fed backstop for the high-yield corporate debt, combined with the thousands of billions of dollars in purchases of Treasury securities, stand out as two global drivers that have powered the eye-popping surge in stock valuations to levels seen during the bubble burst almost two decades.
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This has largely enabled the S&P 500 Index, defying the force of gravity is more down-to-collapse-stock-earnings. The incredible come-back-by-day looks increasingly out of touch with the reality, however, as an investor complacency builds as well and steadfast on the appetite for risk overwrites the volatility.
THE S&P 500 EARNINGS PER SHARE ESTIMATES FOR 2Q-2020 (%CHANGE)
Chart Source: FactSet
In addition to the S&P 500 index EPS estimates for the free fall, the number of unemployed persons increases by millions each week, and the layoffs do not seek temporary, on balance, job losses mount. So, after having spent months in a lock to stop the corona virus spread, which “paralyzed” the global economy and has caused 1Q-2020 GDP of the united states to the collapse of a staggering 5%, the Americans, who now gather by thousands of people in the midst of violent protests over the death of George, on the Cover, through the large cities like Minneapolis, Los Angeles and Chicago.
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Not to mention, as US-China tension escalates in the wake of the corona virus of the pandemic, Washington, dc, and Beijing, have launched more and more terse notes back and forth in recent weeks, which also follows the alleged coup in Hong Kong, the autonomy is due to the ” national security law imposed. Although the details of the The house of China presser last Friday showed little appetite in the White House to impose a fee rates or waste of phase and of the trade agreement.
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This gave a strong boost to the stock, and other pro-risk assets like the Australian Dollar. The movement, which could prove to be short-lived, however, in their review of the reports on the weekend that Chinese officials, in a rebuke to Trump, told the top of the state farm companies to get away from buying American agricultural products such as soybeans.
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In addition, the the economic calendar indicates that a number of impactful data releases that are expected this week, as the PMI reports; and broker, that will give payrolls, which have the potential to catalyze a deterioration of market sentiment. While, increasingly, less horrible data readings could provide a reason for optimism, and perhaps to support the rise in stock prices, it is difficult to dismiss claimants claims with prejudice and the fact that more than 25 million Americans are unemployed, and the look and fit of the secondary, ‘knock-on effect on consumer confidence, savings and consumption.
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As a result, when investors give on the bearish headwinds,The S&P 500 price-the outlook seems to be gradually tilted to the downside, as the stock market index fluctuates in the range of astronomically high valuations. Stocks could continue to walk more, however, in the light of the analysis of the trends of the market, and the absence of a catalyst is that it carries enough momentum to ignite a reversal of the trend. However, it seems more and more likely, the S&P 500 could succumb to a dangerous situation if a day of reckoning dishes from the convenience of investors, a healthy portion of the economic reality.
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— Written by Rich DvorakAnalyst for the DailyFX.com
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