Caution Against Major Market Reversals Globally
The reversal of "recession trades" and "arbitrage trades" are the two main logics, with some analysts also attributing it to the "Trump trade" impact and high market expectations. Last week's major moves included sharp gains in the yen and renminbi, while the Nasdaq and AI stocks plunged. Popular trades with "foolish valuation levels" seem to be unwinding. The yen's movements this week are crucial, with the Bank of Japan and Fed rate decisions guiding its path.
BCA warns that U.S. stocks "will soon peak, with a bear market to follow," advising global investors to increase bond allocations and hold substantial dollar cash. BofA analyst Michael Hartnett suggests that U.S. tech stocks are one bad non-farm payroll report away from a "collapse." Signs of economic cooling will further pressure tech stocks, with a positive outlook on the bond market for the second half of the year.
$S&P 500 Index(.SPX.US$ $CBOE Volatility S&P 500 Index(.VIX.US$ $Nasdaq Composite Index(.IXIC.US$ $Dow Jones Industrial Average(.DJI.US$ $ProShares UltraPro Short QQQ ETF(SQQQ.US$ $ProShares UltraPro QQQ ETF(TQQQ.US$ $U.S. 20-Year Treasury Bonds Yield(US20Y.BD$ $U.S. Treasury Bond ETFs(LIST22866.US$
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