Skip to main content

Posts

Showing posts from April 19, 2021

Monday - Is an inverse correction inevitable this year?

 Shares in the major US stock market are trading lower this morning. The main reason is the mixed feeling that Q1 results are posting. On one hand we can see a lot of growth compared to last year, but if we focus on the overall Q1 only, a lot of companies weren't able to continue the momentum they got last year, specially in tech. The divergence between Nasdaq and DOJ has become a norm, which is historically rare, except for the years associated with the internet bubble. Strong economical data is flashing a sell signal because historical data shows that all time highs in manufacturing and Services PMI stalls the market for 3 to 6 months. Another factor is the the fact that the stock market is priced for perfection; S&P's forward price-to-earnings ratio is at its highest since the 90s. Finally seasonal sell effect is around the corner while May is approaching.  Let me know what you think. Keep smiling and stay charitable.