Olympic Games in Rio - is not the only place, where the put the new records.On Monday, the major US stock indexes have done it again.
The S & P 500 reached a new record high of 2185.54 in early trading on Monday. Another incredible reversal of the trend after the fall of global markets in late June as a result of «Brexit».
Yet, large investors applauded the achievements of the American market, reluctantly confirming their optimistic forecasts.
This weekend, dozens of leading investors and economists gathered in the camp «Camp Kotok», which is located in the eastern part of Maine to discuss the state of the global economy and markets. The conference, organized by David Kotok - president and chief investment officer at Cumberland Advisors - already dubbed a mini-Davos.
The general opinion of inverters and economists: we live in an incredibly scary time with regard to finance. The market will continue to fall, but it will not happen soon.
reasons for growth
Low interest rates and a difficult economic situation abroad will continue to play into the hands of Wall Street.Many analysts argue that stock markets in the US are overvalued, but at the moment it is the best choice for investors.
In addition, Hillary Clinton and Donald Trump talking about large cash injections into the US economy. Clinton plans to spend billions of dollars on infrastructure and other government initiatives. Trump says he is willing to spend twice as much as his opponent, the construction of roads and bridges, as well as make the most large-scale tax cuts since the days of Ronald Reagan's presidency. All these factors are likely to continue to increase the attractiveness of the shares of US companies in the coming months.
The situation abroad
In the short term, it is worth paying attention to the following two alarm signal:
1. The collapse of Europe. Brexit, perhaps, it is only the beginning. If other countries follow the example of Great Britain, and vote for the exit from the block, the structure of the European economy as a whole will be in jeopardy.
"This is the final of the European Union" - warns Jim Bianco, president of Bianco Research. He closely followed the preparation of the referendum in Italy, which will take place in October. Technically, this is a vote on possible changes to the country's constitution, but most Italians see it as another «Brexit». 2. It is not in China. Watch Japan. In recent years, China's economy seems to have stabilized. The days of rapid growth, possibly behind, but the markets are calm.
The situation can change dramatically, warns the president of the China Beige Book International Leland Miller.According to the analyst, Japan has the potential to be the next trigger for the markets.
Falling value of the Japanese currency, the yen, below the 85-90 per dollar could cause large-scale sell-off in Asia. It may also force China to devalue the yuan to start again. At present, the yen is trading above the 100 per dollar, but things may change this fall.