by rodrigo campos
new york (reuters) – the surge in us stock markets, that it seemed as though nothing could break up, today is interrupted by the rapid rise in tensions between north korea and the united states, but analysts expect this trend does not turn out to be correct in itself, that is to say a decline of more than 10%.
the standard & poor’s 500 index, which is the main reference of many investors lost 1.45% thursday, its second biggest decline of the year, and the nasdaq dropped 5%.
“the markets are looking for any reason to set the record straight. geopolitical concerns about north korea and had started the process of stretched valuations, “said peter kenny, head of the strategy in global markets advisory group in new york.” i really think we could see the market to shrink by 1% to 5%.
until this week, the s & p 500, an increase of slightly more than 9%, effective january 1, was at a level of unprecedented development since 2004 on the basis of the ratio of price / earnings expected in the next 12 months.
the progress of last month took place in a context marked by an extremely low volatility, corporate performance, solid and steady improvement in global economic conditions, all of which made up for disappointment to investors at the beginning of the presidency of donald trump in the united states.
but is seems to be changing. in the american market, more than 430 shares have hit on thursday to their lowest level for a year, a record since mid november, just after the election of the president. the average of the lowest 52 weeks from the beginning of the year is around 230 per session.
“the easy money has been made,” said joel kulina, senior vice president at wedbush securities in new york. i invested selectively on out, but my gut tells me we could be in for a rough time of a few months. “
a welcome retreat?
many do not have a negative view of a sharp decline in the s & p 500.
“is welcome, it allows the market to will not be without direction. this is a normal fluctuation, is the fact that move with almost no volatility, which was unusual, “said jim paulsen and director of investment strategy at the leuthold group.
if the decline is continuing, “he adds,” the market will provide a good opportunity to buy. i love the energy, materials, industry, technology and finance. i think by the end of the year, the market will reach new highs and the yield of treasuries) it.
the performance of the us treasury was ten years, just below 2.2%, the lowest level since the end of june, the government bonds with the general trend of decline in the less risky assets.
the cboe volatility index, a barometer of the follow-up to the short-term volatility of the market, has experienced its biggest increase since nearly 3 months to achieve, 16.04, its highest level since november 8, the day of the election of donald trump.
the spot vix has exceeded the index futures, a reversal of the curve, which means that some stakeholders pay more to protect themselves from a sharp decline in the s & p “to protect against future development.
“we are not yet in the market oversold territory, which has a lot of potential to decrease,” said robert pavlik, head of market strategy at boston private wealth. ” it is close to the historical high, so it makes people nervous, they might think that it is time to take a little bit of money on the table. “
(with caroline valetkevitch, saqib iqbal ahmed is carew: chin, lewis krauskopf and noel randewich; marc angrand for service in french, edited by ben van overstraeten)
copyright & copy;, thomson reuters
Translated by forexguides.info Team