After a near six-month ascent, the U.S. stock market is more than likely headed for a pause as investors waited for signals to continue a rally that many now view as overdone in light of the still-shaky economy.
"We've had a great run here, but here's five reasons to be concerned going into the fall," said Art Hogan, chief market strategist, Jefferies & Co.:
•September is historically the worst month of the year.
•The market has had a significant run up from its March 9 lows, up about 50%. "On valuation alone we may be getting ahead of ourselves," said Hogan.
•Insider selling. "The significant increase in insider selling activity suggests that in the eyes of corporate management valuations are becoming stretched at current levels," the analyst said.
•Short interest is winding down. "The lack of meaningful short positions for the most economically sensitive sectors eliminates a source of market support that was significant during the most recent rally," said Hogan.
•The consumer in general. "Unemployment is rising, the value of consumers' home continues to be languishing, and the consumer seems to have become a saver. The de-leveraging of the U.S. consumer is going to be a long process," said Hogan.
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