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Fairfax Underground
Welcome to Fairfax Underground, a project site designed to improve communication among residents of Fairfax County, VA. Feel free to post anything Northern Virginia residents would find interesting.
Welcome to Fairfax Underground, a project site designed to improve communication among residents of Fairfax County, VA. Feel free to post anything Northern Virginia residents would find interesting.
Wall Street is sending huge warning signs for stocks
Posted by:
VoteStrike
()
Date: July 31, 2017 06:22PM
By Joe Ciolli BI
To a growing chorus of strategists and investors across Wall Street, the stock market looks like it's headed for a rude awakening.
Their mounting pessimism comes at a time when US equities are looking healthy, at least on the surface. Major indexes are hovering near record highs they reached this past week, while corporate earnings are growing at a blistering pace.
Yet some market experts think this apparent strength is just masking deeper problems brewing under the surface.
Count Marko Kolanovic, JPMorgan's global head of quantitative and derivatives strategy, as one of those stressing caution. In a client note on Thursday, he said that record-low volatility should "give pause to equity managers." Kolanovic even went as far as to compare the strategies that are suppressing price swings to the conditions leading up to the 1987 stock market crash.
"The fact that we had many volatility cycles since 1983, and are now at all-time lows in volatility, indicates that we may be very close to the turning point," he said.
A sudden move down in US stocks on Thursday — including a notably outsized loss in tech — was widely attributed to Kolanovic's note, highlighting just how seriously many investors have started taking such warnings.
His consternation extends into the hedge fund world, where investment managers are also crying foul about low volatility to anyone that will listen.
Baupost Group, a $30 billion fund, recently highlighted the lack of price swings as a harbinger of pain to come, calling it a possible "accelerant for the next financial crisis." Meanwhile, Highfields Capital Management, which oversees $13 billion, said this past week that low volatility is giving people the false impression that the market is risk-free.
Going beyond the much-maligned low-volatility environment, Bank of America Merrill Lynch has its own reasons for expecting an upcoming rough patch in stocks — one it sees coming sometime this autumn.
Michael Hartnett, the chief investment strategist of BAML Global Research, points to how the S&P 500 has continued climbing to new highs, even as the size of the Federal Reserve's balance sheet has stayed relatively unchanged. He says this divergence is a "classic euphoria signal." Such overexuberance has historically been a sign that investment sentiment is overextended.
EDITORS NOTE: Wow Becky anyone reading this blog would've found this information months ago. Nice of the Business Insider to finally catch up. May be I should change my tagline to "Underground Newz, get your news before it happens." The Underground is so avant-garde you can watch everyone else eat my dust bunnies.
To a growing chorus of strategists and investors across Wall Street, the stock market looks like it's headed for a rude awakening.
Their mounting pessimism comes at a time when US equities are looking healthy, at least on the surface. Major indexes are hovering near record highs they reached this past week, while corporate earnings are growing at a blistering pace.
Yet some market experts think this apparent strength is just masking deeper problems brewing under the surface.
Count Marko Kolanovic, JPMorgan's global head of quantitative and derivatives strategy, as one of those stressing caution. In a client note on Thursday, he said that record-low volatility should "give pause to equity managers." Kolanovic even went as far as to compare the strategies that are suppressing price swings to the conditions leading up to the 1987 stock market crash.
"The fact that we had many volatility cycles since 1983, and are now at all-time lows in volatility, indicates that we may be very close to the turning point," he said.
A sudden move down in US stocks on Thursday — including a notably outsized loss in tech — was widely attributed to Kolanovic's note, highlighting just how seriously many investors have started taking such warnings.
His consternation extends into the hedge fund world, where investment managers are also crying foul about low volatility to anyone that will listen.
Baupost Group, a $30 billion fund, recently highlighted the lack of price swings as a harbinger of pain to come, calling it a possible "accelerant for the next financial crisis." Meanwhile, Highfields Capital Management, which oversees $13 billion, said this past week that low volatility is giving people the false impression that the market is risk-free.
Going beyond the much-maligned low-volatility environment, Bank of America Merrill Lynch has its own reasons for expecting an upcoming rough patch in stocks — one it sees coming sometime this autumn.
Michael Hartnett, the chief investment strategist of BAML Global Research, points to how the S&P 500 has continued climbing to new highs, even as the size of the Federal Reserve's balance sheet has stayed relatively unchanged. He says this divergence is a "classic euphoria signal." Such overexuberance has historically been a sign that investment sentiment is overextended.
EDITORS NOTE: Wow Becky anyone reading this blog would've found this information months ago. Nice of the Business Insider to finally catch up. May be I should change my tagline to "Underground Newz, get your news before it happens." The Underground is so avant-garde you can watch everyone else eat my dust bunnies.
Re: Wall Street is sending huge warning signs for stocks
Posted by:
df;jet;j
()
Date: August 01, 2017 10:19AM
Not to worry, the Fed starts dumping real soon. That will put all the stocks on fire sale. Get ready to BUY!
Re: Wall Street is sending huge warning signs for stocks
Posted by:
Still Obama Economy
()
Date: August 01, 2017 10:25AM
The "republican president recession\depression" usually starts in the second year after republican bills and executive orders start show their effects.
We are only six months in and the economy is still riding the Obama wave.
We are only six months in and the economy is still riding the Obama wave.