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Yesterday, I wrote about how the stocks have turned into a recovery path after last week’s disappointing data. He also said he didn’t know how long the rally would last. Go Figure, US stocks and codes are now red today.
In the first few hours of trading, the S&P 500 was trading 0.5% lower, while the Nasdaq Composite lost 0.6%. BTC was 2% lower in the last 24 hours at the time.
Some of Wall Street’s biggest names say stocks will drop even further. In a memo on Monday, Morgan Stanley strategist Mike Wilson predicted the S&P 500 would drop by up to 10%. Also on Monday, Evercore’s senior managing director estimated that the index would lose up to 15%.
Why are we fixed?
First, US stocks are in tears this summerAnd it’s not just about big technology. Let’s rewind. Mega Cup Tech stock was one of the biggest losers of release day.
Positive economic data and optimism that mutual tariff rates would fall significantly from the numbers originally released, helped to promote a full-scale gathering. By late June, about 80% of S&P 500 companies had surpassed their 50-day moving average. This is where the rate was in autumn 2024.
You know what they say, what goes up has to fall. If there’s one thing you know about stocks, the decline always follows the rally and vice versa.
Number 2, Economic data has recently drawn less positive pictures. Inflation is higher, with job growth and consumer spending slowing.
The customs duties situation has not yet been resolved. The August 1 deadline, which we faced, was extended until last week on August 7th. Import fees from Mexico remain in liquidity as negotiations continue and China faces another deadline of August 12th. Since April, rate levels, due dates, and the industries affected have changed more than I can count, so who knows when the market will become clear.
If the economic data is more positive, investors could shrug from the scope of the trade war. That’s what they’ve done at least most of the summer.
