David Rosenberg, founder of Rosenberg Research, has warned investors that despite the continuous rise in the US stock market, there are dangerous signals of imbalance. Compared to the dismal state of the Chinese stock market, the US stock market experienced a prosperous week last Friday (March 3), with the Nasdaq index surging and the S&P 500 index reaching a historic high. However, David Rosenberg, former Chief North American Economist at Merrill Lynch, poured cold water on this situation and reminded investors that the current upward trend is not sustainable.
Rosenberg pointed out that although the US stock index has been rising, the number of stocks that experienced a decline last week was “more than twice the number of stocks that rose.” He sees this as a dangerous warning because the last time this situation occurred was on October 20, 1987, the day after “Black Monday.”
Rosenberg also noted that most of the stocks contributing to the market’s surge are the so-called “Big Seven” of the US stock market, including Apple, Microsoft, Tesla, and Nvidia. Another US analyst also stated that the “Big Seven” alone accounted for 45% of the S&P 500 index’s returns in January, creating a sense of déjà vu for investors reminiscent of the “dot-com bubble.”
Furthermore, Rosenberg pointed out that the high valuation of stocks also means that investors are obtaining lower returns from the stock market. Lastly, amidst the optimistic expectations in the market regarding the Federal Reserve’s interest rate cuts, Rosenberg reminded investors:
Related Reports
Bears Suffer Massive Loss of $2.6 Billion! Cryptocurrency-related US stocks Coinbase, Microstrategy.. have a big harvest.
Fed “Interest Rates Unchanged” Implies Three Rate Cuts in 2024: Bitcoin surpasses $43,000, Ethereum climbs to $2,280, Dow Jones reaches a historic high.
Recession Warning: US Continues to Experience “Unemployment Claims” at a Two-Year High, Is the US Stock Market in a Bubble?