Global Markets and Nasdaq Composite Report -A Correction is healthier than a bubble
Recently, US stock markets—along with other major markets around the world—have faced significant selling pressure. Many analysts believe equities are overpriced, while others argue that US economic growth and corporate earnings justify even higher market valuations. In the bond market, US bonds are also under pressure. As hedge fund manager Leon Cooperman put it: “Investors buying bonds right now are playing with dynamite.”
In this analysis, we will look at what could happen next in global markets, with a focus on the Nasdaq Composite. Whatever the conclusion, don’t panic—if you decide to exit the market, you will have the chance to do so properly.
Cash Will Be King Again – It Always Is in the End
In one of our past analyses, we noted that the current bullish cycle in global capital markets was nearing its end. This forecast was based on both fundamental and technical analysis. We also said, “Cash will be king again; it always becomes king at the end.” For some investors, this prediction has worked in their favor—while for many others, unfortunately, it has not.
What Happens Next for the US and Global Equity Markets
To assess the current market situation and forecast what comes next, we first need to consider some key points about US stock markets:
(a) Reasons for the Stock Markets to Rise (↑)
√ The US economy is enjoying steady growth and is stronger than at any time since 2008.
√ Unemployment is falling and incomes are rising.
√ Corporate earnings are strong, and according to some analysts—such as Goldman Sachs’ David Kostin—many investment opportunities remain in the market.
🔗 Link: » Goldman’s Recent Report on S&P
√ There is still excessive liquidity in the market, driven by the almost-zero interest rates
