Stock markets: Longest winning streak since 2004 about to end? Analysis by financial experts.

Stock markets: Longest winning streak since 2004 about to end? Analysis by financial experts.

According to a report from finanzmarktwelt.de, stock markets on Wall Street took a breather after the S&P 500 rose for nine weeks in a row. The market was up 24% for the year, while the Nasdaq 100 had its best year since 1999. U.S. 10-year yields ended the year close to where they started and the dollar had its worst year since 2020. Despite solid gains in stocks and bonds from Fed Chair Jerome Powell's dovish pivot and expectations that central banks will rein in inflation, former Treasury Secretary Lawrence Summers warned that markets are underestimating inflation risk. Stock markets are vulnerable to a setback if the U.S. economy slips into recession. The most popular volatility indicator for the S&P 500, the VIX, is showing low levels of fear, which could indicate investor complacency or exuberance.

According to the information from the article, it can be expected that the stock markets will continue to develop positively for the time being, despite a certain level of fatigue. The uncertainty surrounding Fed policy and fears of a recession have subsided for the time being, and many market participants expect 2024 to be a similarly strong year. Low 10-year US yields and the Fed's dovish pivot suggest equity markets remain supported. However, experts like Lawrence Summers warn that the market may be underestimating inflation risk and stock markets are vulnerable to a setback if the U.S. economy slips into recession. It is important to closely monitor stock market developments and central banks' monetary policy decisions to identify possible risks and opportunities.

Source: According to a report from finanzmarktwelt.de,