Wall Street “chatter” of an looming US bear market are a long way off the facts, according to a leading analyst.
Rumours that a sell-off is imminent, despite the current strong bull market, have been circulating for weeks.
They gained traction when America’s leading market indices – the Dow, S&P, and Nasdaq – finished at a record high after the end of a three-day government shutdown following gridlock over the US budget.
Meanwhile the dollar has plunged against the euro and the pound.
“There’s been almost continual chatter in recent weeks on Wall Street and beyond about the current melt-up, before a forthcoming meltdown,” said Tom Elliot, deVere Group’s international investment strategist.
“It supposes that we’re experiencing the last euphoric rally in an asset class bull market, before the collapse.
“Whilst it’s true that Wall Street is the most overvalued of the major stock markets, I am sceptical about an imminent collapse. Where would it be coming from? The only real risk is that bank account rates or bond yields rise sufficiently to persuade investors to sell shares and invest in risk-free assets.
“But with the inflation so low and the Fed being so cautious, I don’t see that happening any time soon. Another trigger for a sell-off might be a US recession. But again, no evidence of one around the corner.”