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Shares rebound on Tuesday, fending off a host of concerns – tensions between Washington and Beijing, the lack of a U.S. coronavirus stimulus package and the resurgence of the virus in Europe.
Optimists helped push the Nasdaq Composite COMP,
to set another record on Monday, as some see a new S&P 500 SPX,
top coming end of August.
Miller Tabak + Co. senior strategist Matthew Maley is a long way off the bullish camp, which believes stocks are ripe for a short-term decline of 10% to 15%. An overbought stock market, especially in mega-cap tech stocks, uncertainty over a new stimulus package, US-China relations and fears of a fall pandemic wave should worry investors, he said.
But he has a more “constructive” view of the market’s performance in the fourth quarter. In our call of the dayMaley suggests repeating a strategy from the previous year – “raise cash now” to take advantage of next fall and maximize profits on the rally later this year.
“Those who followed our suggestions in January / February were very happy when March and April arrived… and we think they will also be very happy over the next two months if they follow the same strategy,” says Maley in a recent note. to customers.
The Federal Reserve is the key here. “The Fed’s main concern is the credit market, not the stock market. Only a sharp drop in inventory would destabilize credit markets, not a 10-15% correction, ”he says.
So he expects the Fed to reopen the taps when this correction threatens to get uglier, as seen in the first quarter. This could “cause the S&P to move up towards 3600, but we also think it will be very difficult for the stock market to rally ANYWHERE without first experiencing a normal / healthy correction,” Maley says.
History is also a factor, with the US presidential election looming. He notes that the stock market rallied from Election Day (or shortly thereafter) through year-end on 10 of 12 occasions since 1972, with an average gain of 7.2%. And that rally will take place “it doesn’t matter who wins the November election,” he said.
The market
Dow YM00,
S&P ES00,
and Nasdaq NQ00,
futures evolve, alongside European SXXP equities,
while Asian markets have drifted.
Table
Here’s how the first half of the year went for the world’s largest sovereign wealth fund, the Government Pension Fund Global, which lost $ 21.3 billion in the first half of 2020:
The buzz
A trio of retailers had strong results, with shares of Walmart WMT,
, Home Depot HD,
and Kohl’s KSS,
all climb in pre-marketing.
The United States has placed further restrictions on Huawei, after President Donald Trump once again declared the Chinese tech group’s products to be spyware.
Another tech giant may have entered the race to buy social media group TikTok, along with Oracle ORCL,
is reportedly in preliminary talks with Chinese owner Bytedance to purchase its operations in four countries. Microsoft MSFT,
has been a potential primary buyer so far.
Video game maker Epic is trying to get temporary restraining order in California to block iPhone maker Apple AAPL,
to remove the hit game “Fortnite” from the App Store. Epic’s battle might just help start an antitrust investigation against big tech.
The virtual Democratic National Convention kicked off Monday, with a keynote address by former First Lady Michelle Obama, who launched a meteoric attack on Trump.
A clear data schedule includes housing starts – the number of new homes on which construction has started.
Random readings
Portuguese president becomes a hero of the Algarve.
What We Need: A new baby panda is on its way to the Washington National Zoo.
How the UK government got an “F” from students.
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