American game retailer GameStop’s poor operations have attracted millions of retail investors to snatch the stock recently, detonating an epic short-squeeze and massacre of short-selling institutions. Due to the enthusiasm of retail speculation and trading, the market is worried about the bubble reappearing, dragging down Friday (29th) US stocks plunged 620 points. Analysts reminded that the stock market is alarming and a 10% downward revision is coming. Please wear your seat belts. Whether the bull market ends depends on the “3R”, including rates, regulation and redistribution.
Bank of America analyst Michael Harnett said that all bull markets and bubbles in history were ended by 3R. In terms of interest rates, he believes that inflation may heat up in the second quarter. Even if the Federal Reserve (Fed) releases more dovish messages in its decision-making meetings in March, April and June, economic headwinds still need to be watched. In the United States, there will also be 5% expansion of gross production, corporate profit growth of more than 20%, inflation rate of 3%, and excessive speculation.
In terms of regulation, Harnett said that over the past three months, more than $270 billion has flowed into the stock market, of which $28 billion has entered small stocks and $90 billion has entered emerging market stocks and bonds.
He reminded investors that if the People’s Bank of China announced a liquidity tightening, if Beijing suppressed speculation and caused mainland bank stocks to fall, the panic of tightening liquidity would spread.
As for when the bull market under quantitative easing will step on the brakes? Harnett pointed out that if the heavyweight technology stocks and investment-grade bonds set off a wave of sell-off, it would not be good.
Regarding the recent short-squeeze storm of GameStop retail investors overthrowing hedge funds, Harnett believes that it is an escalation battle in pursuit of wealth equality. How to end inequality can only start with raising the wages of the poor and raising taxes for the rich, if only targeting young investors Supervision may cause market dissatisfaction.
(Zhongshi News Network)
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