The listed companies are going to earn as little as in the Great Depression: is it time for stock market correction?
Listed companies buckle up. One more quarter. Experts and analysts expect the market to witness the biggest profit debacle since the Great Depression in the wake of the crisis in the coronavirus. Now, is it time for the stock market rally to take a breather?
Short answer: yes. Correct answer: it depends. The analyst of ForexNews.online, J.M. Rodríguez, recently recognized that "getting long in the Nasdaq (and in the other exchanges) it does not make much sense, although that does not mean that it cannot rise, "in fact it is in absolute free rise," he stressed.
"Since March it has given several signals to 'buy' and, of course, it is not an index to get short," he added. However, Rodríguez has asserted that we can be "in the final stretch of the bullish stretch, just before corrections of between 15% and 25% take place." And it is in those falls in which the investor can take advantage to get on a future rally or, to sell if he already did it at the time, before everything began to rise from its March lows.
In the case of Wall Street, Always exhibiting greater health and strength than the rest of the world parks, quarterly earnings are expected to fall as much as in the fourth quarter of 2008. Yes, as in the last global financial crisis after the fall of Lehman Brothers.
The problem with buying in possible dips is that the investor enters unfamiliar terrain and bets on a rebound that may never come. "There is an information deficit that we need to clear at some point," he acknowledges. Sebastien Leburn, manager Boston Private, in statements to MarketWatch.
"The earnings season will be so important because it will offer us a dose of reality", he points out, in turn, Brad Cornell, professor emeritus of finance at UCLA, also during a speech for the US newspaper. "They are going to tell us if a company is really on the right track and if its rebound is justified," he added.
WALL STREET, SAFE BET
They will always have the Fed. Oanda They highlight that, despite going to earn 40% less, "the listed companies face their publication of results with increases and are willing to cut jobs to balance their balance sheets." In the case of Wall Street, many traders assume that the stock markets will continue to be sweet as they anticipate "That the Fed keep rates close to zero for a couple of years and governments continue to water with fiscal stimuli."
Wall Street seems like a good buying opportunity, in case the expected correction takes place and the poor results are the triggers.
Since Julius Baer They claim that, despite having performed worse than European stock markets since the beginning of June due to the outbreaks recorded in the US, US equities are still their biggest bet: "The virus will be a temporary problem and the US stock markets will continue to offer higher growth prospects, thanks in part to its technology. "
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