2023-05-01 07:57:59
Well-known economist Henrik Zeberg predicts that US stocks may experience a large-scale “blow-off top” pattern in the next few months and encounter one of the largest crashes in history.
Zeberg tweeted that the stock market may be on the rise, whiledollar index (DXY) may be falling.However, withdollar indexSoaring parabolicly, the stock market will crash.
Zeberg said: “We are going to have the biggest stock/risk asset crash since 1929! Deep recession! But first it will be an unbelievable pullback from the top that pulls investors into the wrong side before the stock market crashes.”
“Top-off” means a sharp rise before the bubble peaks, followed by a slump.
Marko Kolanovic, chief market strategist at JPMorgan Chase, also said a few days ago that the Chicago Board Options Exchange Volatility Index (VIX) showed abnormal calm, which is likely to cause trouble for investors who think that the calm market is the best time to buy.
Kolanovic noted that this metric is unusually low given rising interest rates, tightening financial conditions, economic risks and heightened geopolitical tensions, a market dynamic that also artificially dampens perceptions of economic fundamental risk. He suggested that investors use the market strength brought regarding by the upcoming earnings report as an opportunity to reduce their holdings of stocks.
Ann-Katrin Petersen, a senior strategist at BlackRock, also said that investors should remain cautious regarding US stocks because the market has not yet fully digested the impact of the Fed’s interest rate hike. The prevailing view on Wall Street is that corporate earnings will be flat this year, but Petersen thinks even flat is “on the bright side.”
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