Financial expert: Stock market sentiment could rise at the end of the year, according to Ned Davis Research

Financial expert: Stock market sentiment could rise at the end of the year, according to Ned Davis Research

According to a report by www.businessinsider.de, the stock market collapsed in August and September, leading to extremely pessimistic sentiment. However, strategists at Ned Davis Research (NDR) note that the lows could trigger a year-end rally as the decline comes during a seasonally weak time of year. So the recent weakness could set the stage for a possible year-end rally.

However, the fall in US stock markets in September of five percent for the S&P 500 and three and six percent for the Dow Jones Industrial and Nasdaq, respectively, is cause for concern. Sentiment is approaching extremely bearish levels and recent weakness could mean the emergence of a year-end rally. The S&P 500's earnings yield has fallen below the 10-year Treasury yield for the first time since 2009, reducing the attractiveness of stocks compared to bonds.

However, when looking at the current situation, the risks associated with tight monetary policy and rising bond yields must also be taken into account.

Overall, the decline in equity markets could provide an opportunity for cheap entry points to capitalize on a possible rebound towards the end of the year. The impact could have a positive development on the market and in the financial sector in both the short and long term.