Investment concern about the rise in US stock prices
Investors in global financial markets are afraid of the future of the American stock market, despite the rise it has achieved in Wall Street indices, as the Standard & Poor’s S & P 500 index rose in the first six months of 2023, registering a 20% increase from its lowest level.
But even so, investors say they can’t stop looking over their shoulders for fear of the future of the US financial market, even after US stocks have weathered big risks, including repeated interest rate hikes and a banking crisis.
On the other hand, money managers say they are not convinced that the current rise in US stocks is sustainable and continuous, according to a report published in the Wall Street Journal today, Monday.
The historical trajectory of Wall Street financial market trends indicates that investors tend not to like emerging markets when they are in them to increase their risk.
Traders are worried about the 11-year bullish trend in US stocks, born of the 2008 financial crisis, and whether it will continue.
Investors say they are watching the worrying trends in the US market. Among these trends, the earnings season, which may show the underlying weaknesses in the US economy.
S&P 500 companies are expected to report a 7.2% decline in profits for the second quarter, according to FactSet data, marking the third consecutive year-over-year profit decline.
Investors are also watching whether companies’ pricing power is ebbing. The net profit margin of companies listed in the S&P 500 is expected to decline to 11.4%, down slightly from the previous quarter and significantly less than the peak of 13% reached in 2021. Companies may find themselves financially squeezed, as they face rising financing costs, While also struggling to raise prices further as inflation subsides.
Among the trends that investors monitor; Reducing the heavy clouds accumulated in global markets, which were worrying investors in the US market, as markets outside the United States started 2023 positively.
China had lifted its coronavirus restrictions, sparking optimism that a wave of spending from Chinese consumers would unleash economic growth at home and abroad. Asian stock indices also rose, as well as those in Europe.
On the other hand, the eurozone has slid into recession, and investors are still concerned about the impact of the war in Ukraine and inflation, which is still more stubborn.
There are concerns about the repercussions of interest on the bond market, and the crisis of the US “Silicon Valley” bank, whose collapse was sparked in part by the disclosure that the bank had incurred a loss of $ 1.8 billion in its bond portfolio due to high interest rates.
Many investors say they are concerned about the devastation caused by the high interest rate on the US currency.
2023-07-10 12:12:20
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