Risks Out There 06 (May 20 - Dec 24)

[behappyalways]

It will have a ripple effect...

TradingView
@tradingview
The total market cap of all cryptocurrencies has dropped $1.2 trillion in just two weeks.

https://mobile.twitter.com/tradingview/ ... 3160345603

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Not Jim Cramer
@Not_Jim_Cramer
Recent Warnings in the Equity Market - Recap

https://mobile.twitter.com/Not_Jim_Cram ... 4606119943

[behappyalways]

The Chinese govt has been trying to 'sanitize' their market from the bubble out there. The Chinese stock market has fallen about 20% , while crytocurrency and raw materials are being hit. Not that the Chinese will not be affected when the bubble burst but with the policies meted out, I guess they hope the effect would be minimised.

China Warns Global Financial Bubble Could Burst
https://www.zerohedge.com/markets/china ... ial-bubble

A good watch on the related topic
'21.05.25【豐富│東南西北龍鳳配】Pt.1 美國扮牛，中國扮熊，為什麼？
https://m.youtube.com/watch?v=NsCkK4njW-o&t=827s

[winston]

Morgan Stanley red flags will keep investors on their toes

by Andrew Wong

Over the past few months, fundamentals-based analysts from Morgan Stanley have become increasingly bearish on the stock market.

Some of the reasons given are that the market is too optimistic, yield growth is slow, market pessimism has remained steady with no sense of any crisis, and the forward price-to-earnings ratio is too high.

These analysts expect the entire market could see a 10 to 15 percent correction in the next six months.

This is only the fifth time in the past 30 years that all five of Morgan Stanley's market indicators have given out 'sell' signals. The previous four were March 1990, May 1992, June 2007 and February this year.

Source: The Standard

https://www.thestandard.com.hk/section- ... their-toes

[behappyalways]

Who's Ready for a Stock Market Crash? 5 Reasons a Big Drop May Be Imminent
https://www.fool.com/amp/investing/2021 ... ssion=true

[winston]

Moody's economist predicts up to 20pc market correction

The firm’s chief economist expects a more hawkish Federal Reserve will spark a 10 percent to 20 percent pullback.

And, unlike the sharp drops over the past several years, Zandi anticipates a quick recovery won’t be in the cards particularly because the market is richly valued. He estimates it could take a year to return to break even.

Despite his market warning, Zandi believes the economy will avert a recession because the downturn is more about risk asset prices getting overextended than a serious fundamental issue.

“The economy is going to be rip-roaring,” he said. “Unemployment is going to be low. Wage growth is going to be strong.”

Zandi also sees more trouble brewing in the commodities and cryptocurrency sell-offs. Plus, he’s worried about the sustainability of a strong housing market amid higher mortgage rates.

Source: The Standard

https://www.thestandard.com.hk/breaking ... correction

[winston]

Market analysis in one question: has the Fed lost the plot on inflation?

Investors remain assured that central banks will issue more debt if things turn sticky, but they will take flight the moment they sense the Fed has lost control of inflation and will have to raise interest rates

by Richard Harris

Source: SCMP

https://www.scmp.com/comment/opinion/ar ... -inflation

[winston]

Stagflation, debt mountain pose black swan threats

by Andrew Wong

I have repeatedly stressed that the US Federal Reserve's ultra-loose monetary policy will not change in the near future and given my reasons why.

However, while the world's central banks, led by the Fed, will maintain ultra-loose monetary policy for a long time, we need to be more aware of the threat of a repeat of 1970s stagflation and the 2008 debt crisis.

The current loose monetary and fiscal policy will definitely continue to inflate the asset and credit bubble, amid high PE ratios and low equity risk premiums.

Many governments have fallen deeper into debt because of the Covid pandemic while relying on central banks to maintain the current debt and fiscal spending, leading analysts to believe that these governments have gone bankrupt.

So if there's a crisis in the global economy and financial markets, will these countries be able to rescue banks, businesses and the common man?

Source: The Standard

https://www.thestandard.com.hk/section- ... an-threats

[winston]

Why overpriced stock markets are headed for a major correction

Low bond yields caused by central banks’ ultra-loose monetary policies leave income-starved investors with little choice but to remain invested in equities

The combination of ever-loftier valuations and rising volatility associated with the withdrawal of stimulus will eventually prove too much for stock markets

by Nicholas Spiro

EPFR published data last weekend that showed global equity funds attracted a whopping US$580 billion in inflows in the first half of this year.

If the pace of the inflows keeps up in the second half of this year, global equity funds will attract more inflows in 2021 than in the last 20 years combined.

TINA – “there is no alternative”

US Treasury yield stands at just 1.37 per cent, lower than in February. Japan’s 10-year yield is stuck near zero, while its German equivalent is trading in negative territory.

Although nominal yields are higher in the US, real yields – which strip out the effects of inflation – are deeply negative.

Allocations to global stocks are at their highest level since the beginning of this year and close to record highs. Allocations to global bonds, meanwhile, stand at a three-year low.

Source: SCMP

https://www.scmp.com/comment/opinion/ar ... correction

[behappyalways]

Bond Yields Are Puking Again...
https://www.zerohedge.com/markets/bond- ... king-again

[winston]

3 Things That Could Send The S&P 500 Down 20%

by Wayne Duggan

1. The Fed implies tapering could begin sooner than expected or be more aggressive than anticipated.

2. COVID-19 cases continue to rise and trigger lockdowns or reduced consumer spending.

3. Economic growth stalls and inflation rates continue to rise.

Source: Yahoo Finance

https://finance.yahoo.com/news/3-things ... 45353.html