Many eminent investors suggest that the time may be ripe for a major stock market correction.

Becky Berkman

2017-08-13 09:36:00 Sun ET

Several investors and billionaires such as George Soros, Warren Buffett, Carl Icahn, and Howard Marks suggest that the time may be ripe for a major financial market correction. The recent optimistic Trump rally has catapulted stock and bond prices by a 20% margin. This stock and bond market overvaluation seems to be a natural result of President Trump's generous pro-growth fiscal stimulus trifecta of lower income taxation, financial deregulation, and new infrastructure with corporate offshore cash repatriation. Whether the current Trump financial market rally can deliver tangible economic gains depends on the eventual GDP growth trajectory toward the target range of 2.7% to 3.3% per annum.

During the current interest rate hike, we expect most stock and bond prices to moderately react to monetary contraction and self-fulfilling prophecy in a soft downward path. This new normal scenario does not necessarily correspond to secular stagnation in the precise words of Larry Summers and others. However, it is reasonable to anticipate a reasonable financial market correction in light of the recent nuclear standoff between America and North Korea, U.S. monetary contraction, and Trump trade conservatism. Overall, geopolitical risk remains the primary source of economic uncertainty as the Trump administration seeks to maintain a delicate balance between these undercurrents for better business growth and financial stability.

 


If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.

Blog+More
Apple and Samsung are the archrivals for the title of the world's top smart phone maker.
Olivia London

2018-06-25 12:43:00 Monday ET

Apple and Samsung are the archrivals for the title of the world's top smart phone maker.

Apple and Samsung are the archrivals for the title of the world's top smart phone maker. The recent patent lawsuit settlement between Apple and Samsung

+See More
Neoliberal public choice continues to spin national taxation and several other forms of government intervention.
Peter Prince

2019-01-07 18:42:00 Monday ET

Neoliberal public choice continues to spin national taxation and several other forms of government intervention.

Neoliberal public choice continues to spin national taxation and several other forms of government intervention. The key post-crisis consensus focuses on go

+See More
Federal Reserve institutes the third interest rate cut with a rare pause signal.
Daisy Harvey

2019-12-10 09:30:00 Tuesday ET

Federal Reserve institutes the third interest rate cut with a rare pause signal.

Federal Reserve institutes the third interest rate cut with a rare pause signal. The Federal Open Market Committee (FOMC) reduces the benchmark interest rat

+See More
We can decipher valuable lessons from the annual letters to shareholders written by Amazon CEO Jeff Bezos.
Becky Berkman

2019-07-19 18:40:00 Friday ET

We can decipher valuable lessons from the annual letters to shareholders written by Amazon CEO Jeff Bezos.

We can decipher valuable lessons from the annual letters to shareholders written by Amazon CEO Jeff Bezos. Amazon is highly customer-centric because the wor

+See More
Facebook reaches a $5 billion settlement with the Federal Trade Commission over Cambridge Analytica user privacy violations.
Monica McNeil

2019-08-12 07:30:00 Monday ET

Facebook reaches a $5 billion settlement with the Federal Trade Commission over Cambridge Analytica user privacy violations.

Facebook reaches a $5 billion settlement with the Federal Trade Commission over Cambridge Analytica user privacy violations. The Federal Trade Commission (F

+See More
American unemployment declines to the 50-year historical low level of 3.5% with moderate job growth.
Chanel Holden

2019-11-19 09:33:00 Tuesday ET

American unemployment declines to the 50-year historical low level of 3.5% with moderate job growth.

American unemployment declines to the 50-year historical low level of 3.5% with moderate job growth. Despite a sharp slowdown in U.S. services and utilities

+See More