The ups and downs in the stock market over the past few weeks have not been pleasant to anyone – although they help keep financial journalists working.
Here’s another idea. The latter pattern may be more than just an ordinary course of action – and it is something you should pay attention to.
“After that lint A crowd out of nowhere yesterday, I’m starting to think about how the current market pattern of instability and volatility is very similar to what we saw in January and February of this year, wrote David Rosenberg, an old strategist who now runs his own company, Rosenberg Research.
Rosenberg is often known as the bear, and he has had a half-full look through most of this year. But it is also known as Anticipate the mortgage crisisEven while working for one of the biggest catalysts – and victims – of the bubble, Merrill Lynch.
| The biggest move in the Dow Jones Industrial Average|
– 405 points
|Source: Rosenberg Research|
While investors around the world were aware of the new coronavirus in January and February – few people predicted how bad it would get. Rosenberg also notes that markets “fell” in February, but only ended up “to their lowest levels when the Fed, Treasury and Congress joined forces to engage in the most intense easing policy ever”.
Veteran investors sometimes like to tie the bond market to signals and stocks with noise.
But Rosenberg believes the recent fluctuations in the stock market should be a cause for concern.
Does this behavior seem normal to you? Asked. “Do you think the cause of all this volatility? Could it be an indication that there is something lurking in the corner?”
It is unclear what this “thing” could be, despite the long list of headwinds, from the US presidential election to Brexit without a deal to the seemingly endless series of natural disasters. Underneath all of that, there is a spike in the number of global COVID-19 cases that could overwhelm health systems and weaken economies – and which forecasters expect will only get worse with the return of winter.
“The fatigue has started, people are getting dirty,” Rosenberg wrote, “but the impact on economic activity is still a burden.” “And as we go into fall and then winter, that could get worse. Market volatility, as at the end of the year, is telling you to exit Dodge – as it is in, de-risking.”
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