SAMT Blog
S&P 500: what's next?
07. June 2020, by Mario V. Guffanti
Technical Analysis
Among the news that appeared in the specialized press this past week, I read a couple of interesting articles published in the Financial Times. The first one talks about the recent positioning of hedge funds, now ready for another stock market crash. The second is an interview with Jeremy Grantham, the veteran strategist known for calling several of the biggest market turns of recent decades, who has reduced his fund's global net equity exposure from 55% to 25%. Meanwhile, stock indices have had one of the best and strongest rises in their history.
In my previous May article, I made a comparison between the current market crash and some historical situations that technically could be similar, such as the 1929 and 1987 crashes. I then argued that in the short term the current recovery was much stronger than in past cases.
In the conclusions of the article I wrote that it is well known that the interventions of the FED create financial inflation, and therefore it is not to be excluded that the trend may somehow continue. In the last period, the stimulus manoeuvres of the ECB have also been added, which have also brought a strong benefit to European financial markets.
It is true that there is a strong disconnection between the prices of financial assets and the real economic situation, but at the moment central bank puts, compared to negative variables, are a strong ...
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