The stock market may collapse by 50%

The 101,000 U.S. stock market is in a very difficult position and could soon fall by 50%, warns an expert who reached the March landslide. In the event of a new market meltdown, only a change in sentiment is required, according to James McDonald, head of Hercules Investments Investments. He cites three reasons that could be catalysts for a new stock market collapse, writes ProFinance.

“A new type of virus can change investor sentiment and trigger aggressive selling, especially given that the stock market is in the area of historical highs,” the expert notes.

Shares of technology companies, which are of great importance in stock indices, are now more expensive than their counterparts on the eve of the market crash of 1929, 1987, 2001 and 2008. Moreover, the new $900 billion stimulus package is not big enough to offset the economic losses resulting from the pandemic.

Wall Street Banks expects S’P 500 to grow further in 2021, but Bank of America (BofA) advises selling shares in the first quarter of 2021

Cash in investors’ portfolios increased to 4% for the first time since May 2013, according to the results of bofa’s monthly investor survey. Bullish sentiment on the stock market and commodity assets has reached record levels since February 2011, and the purchase of bitcoin has become one of Wall Street’s most popular strategies. All of this, but the most low cash reserve among investors, signaled a share sale, according to the bank.

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