Beware heightened risks of ‘fragility shocks’ in a market too dependent on the Fed, BofA warns

MarketWatch2021-05-12

Investors will likely need ‘to walk a Goldilocks tightrope’ this summer, say analysts at Bank of America. Fragility risks in the market are at the highest ever, as investors keep looking to the ...

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Comments

H2Oh2o
2021-05-13
H2Oh2o
Like comment
jhhh
2021-05-12
jhhh
We are in for a roller coaster ride
- DC07:
  HOld on tight! Not for the faint hearted though [Facepalm]
JeryChan
2021-05-12
JeryChan
Like comment
- Jas4sun:
  good
- jhhh:
  Like
- YoshiTei:
  done
donnie991
2021-05-12
donnie991
Like commend
- YoshiTei:
  done
riphunter
2021-05-12
riphunter
Cool
Wisher
2021-05-12
Wisher
Be positive.

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One concern is that a less accommodative Fed couldhurt the valuations of high growth stocks.\nThe market’s reaction to a weaker-than-anticipated jobs report on Friday underscored its reliance on the Fed, as the“bad news” was treated as “good news,”according to the analysts, who pointed to the jump that day in the technology-heavy Nasdaq Composite index. In other words, stock-market investors took thedisappointing jobs reportas reason for the central bank to remain dovish.\n“The Fed has their pedal to the metal trying to restore the pre-Covid labour market,” the analysts wrote. “While the Fed can’t afford to appear uncertain, their dogmatic confidence that inflation won’t become problematic is equally suspect.”\nU.S. stocks fell Monday and extended losses into Tuesday. The Nasdaq Composite indexCOMP,-0.09%was down 0.2% in afternoon trading, while the S&P 500SPX,-0.87%fell 1% and the Dow Jones Industrial AverageDJIA,-1.36%was 1.5% lower.\n“Markets will likely need to walk a Goldilocks tightrope over the summer,” the Bank of America analysts said. That means investors will need to navigate increasingly “tricky territory” where they’re avoiding both the upsiderisks of inflationand overheating as well as the downside risk that “herd immunity remains elusive” as the pandemic persists, according to their note.\nRisks on both sides of the tightrope could be catalysts for market shocks.\n“Fragility will strike again, as valuations and positioning look stretched,” the analysts warned. “Trading liquidity continues to be poor.”","kind":null,"is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":191313014,"gmtCreate":1620850039338,"gmtModify":1704349262938,"author":{"id":"3567317936994333","authorId":"3567317936994333","name":"H2Oh2o","avatar":"https://static.tigerbbs.com/95e325d961a8e8741a4d98515337a6de","vip":1,"crmLevel":4,"crmLevelSwitch":0,"idStr":"3567317936994333","authorIdStr":"3567317936994333"},"htmlText":"Like comment","listText":"Like comment","text":"Like comment","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/191313014","repostId":1173522983,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":191002441,"gmtCreate":1620826092583,"gmtModify":1704348958411,"author":{"id":"3564727225062351","authorId":"3564727225062351","name":"jhhh","avatar":"https://static.tigerbbs.com/f4f3f7b72783725da207a373581e5430","vip":1,"crmLevel":5,"crmLevelSwitch":0,"idStr":"3564727225062351","authorIdStr":"3564727225062351"},"htmlText":"We are in for a roller coaster ride","listText":"We are in for a roller coaster ride","text":"We are in for a roller coaster ride","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/191002441","repostId":1173522983,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":4304404,"gmtCreate":1620829943242,"gmtModify":1680788351386,"authorId":3574483552269213,"author":{"id":3574483552269213,"idStr":"3574483552269213","authorId":3574483552269213,"name":"DC07","avatar":"https://static.tigerbbs.com/8591c748d1cae4e6f686b3168830b2d4","vip":1,"crmLevel":4,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":191002441,"type":1,"supId":0,"prevId":0,"content":"HOld on tight! 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