US Market Falls When Debt Limit Is Resolved. How Come?
The S&P 500 index has been rising steadily for the past 5 trading days (see above).
On Fri, 19 May it had even breached the 4,200 level during trading session.
On Mon, 22 May, S&P 500 index closed at 4,192.63 - its highest level in easily 6 months.
If you asked me upfront what I think, I would say - when the Debt Limit crisis is resolved, US market might just rally.
How so? With the “nagging pain (debt limit) in the neck” gone, it is time to celebrate, right?
Don’t Be Fooled By S&P 500 Rally:
I could not have been further from the “truth” after reading above post, as elaborated by Mr Mike Wilson, Chief U.S. Equity Strategist and Chief Investment Officer of $Morgan Stanley(MS)$.
Mike Wilson’s Warning:
“Is this finally the breakout to confirm a new bull market? Short answer is NO,” in Mr Wilson’s a note to his clients on Mon, 22 May.
Numerous risks persisted, he argued, including overvaluations and gains being driven by a limited range of equities.
He further added that “investors should remain vigilant & be wary of falling into a trap of betting on stocks after last week’s rally“.
Quite certain we definitely could learn from Mr Wilson & others who are “accurate” experts in their areas of work.
Afterall, Mr Wilson has been voted #1 in stock strategist by “Institutional Investor” in their latest annual Oct 2022 survey.
In a separate reading, I came across another article from “Market Insider” (refer to above).
If I were to “join the dots” between:
Mr Wilson’s warning to his clients (that US market will dip).
Possibility of $700 Billion T-bills “sucking” US market “dry”.
It does seem to add up.
Personally, this is what I think:
Cash is king. Build up your war-chest.
Continue to monitor your stock wish list in the meantime.
Buy or add, during stock price correction/s; preferable “drastic” change.
Do not chase a stock, when its price is rising.
When its comes the US market, there will always be buying opportunity; just don’t FOMO.
Do you think the Debt Limit crisis could be resolved & closed by this week?
Do you think US market will fall if US Treasury Dept issues Treasury Bills to “raise” money?
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Give a "LIKe", "Share" & "Re-post" pls. The rating is very important to me. Tks!
Would you consider "Follow me" so that you get first hand read of my Daily new posts? Tks!
thanks for ur sharing