Wall Street Closing    Bahrain's king holds talks with Putin on key bilateral, regional issues    Saudi Arabia's anti-corruption authority initiates 105 cases recently    Saudi Foreign Minister urges action against ‘subversive' regional interventions    Saudi Special Olympics to Take Part in Special Olympics World Winter Games 2022    NCB announces completion of issuing additional Tier 1 Sukuk    Minister of Foreign Affairs Participates in Ministerial Meeting of Arab-China States    Registration for Hajj begins; 70% will be expats    Bahraini King, Russian President Discuss Bilateral Relations    SAMA: No move to freeze expat accounts with transactions higher than their wages    Kuwait's COVID-19 cases cross 50,000-mark    Qatar COVID-19 cases pass the grim figure of 100,000    OIC Secretary General Meets with Danish Ambassador to Saudi Arabia    Education Minister Meets with New Zealand's Ambassador    46th Meeting of UN World Tourism Organization (UNWTO) Commission for the Middle East Concludes    Saudi Arabia records more recoveries than new cases    Afghan Ministry of Foreign Affairs Appreciates OIC's Efforts to Achieve Peace in Afghanistan    Bahrain Bourse Falls    Biggest Saudi pharma firm Nahdi said to be in IPO talks    SWCC plans webinar on Innovation in Desalination Brine Mining    SFA and WHO sign accord in several strategic areas    KSrelief Project "Masam" Dismantles 1,092 Mines in Yemen during First Week of July    World's biggest camel hospital opens in Qassim    SASO: Quality Mark to be Mandatory on Electrical Connections as of 7/8/2020    IsDB Awards Palestine $35.7 mln to Combat COVID-19, Launches Initiatives Creating Jobs, Empowering Palestinians, economically    DSC honors winners of Pocari Sweat 19K Run    Enforcement Courts to Entrust Judicial Liquidations to the Entrustment and Liquidation Center (Infath)    Top Egyptian actress Ragaa Al-Geddawy dies from COVID-19    Greenwood shines as 5-star Man United crush Bournemouth    Vardy nets 100th Premier League goal as Leicester beat Palace    228 football coaches, players arrive in KSA from Sao Paulo    ThreatQuotient Integrates with Intel 471 Cybercrime Intelligence    Apollo Proton Cancer Centre receives prestigious JCI accreditation    Veteran Bollywood choreographer Saroj Khan dies aged 71    Bayern Munich Sign Leroy Sane from Manchester City    ‘Football industry will bounce back stronger from COVID-19'    SAFF appoints Swiss Navarro as director of referees department    Complementary, Alternative Medicine Practicing 1st Manual Version Issued    Actor Sushant found hanging in his Mumbai residence    Wives detect polygamy: Divorces up 30% in Saudi Arabia    Council of Senior Scholars advises old people to pray at home    Saudi Ithra center launches dialogue sessions with most famous creators in the world    SFDA Implements National Program to Ensure Safety of 10,000 Food Samples    Saudi Surgeon Managed to Remove Kuwaiti Girl's Brain Tumor, as French Physician Declined, in the last Moments    Senior Scholars Council Issues Decision No. 246 Regarding Attendance of Friday Prayer and Prayers at Mosques in a Case of Spread of Epidemic or Fear of its Spread    Custodian of the Two Holy Mosques Addresses Citizens and Muslims on Eid Al-Fitr    Custodian of Two Holy Mosques addresses Citizens and Muslims on the Advent of Holy Month of Ramadan    Ministry of Hajj and Umrah Launches Awareness Message on Sacrifice Day    

Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.

Summer rumblings could herald a stormy fall for U.S. stocks
Published in Alriyadh on 19 - 08 - 2017

The Trump-fed rally in stocks, lately showing signs of faltering as the long Wall Street summer nears its end, faces a key test in the weeks ahead with the approach of a historically unkind season for equities and a clutch of issues - such as raising the debt ceiling - awaiting the return of lawmakers to Washington.
With September, typically the worst month in the year for stocks, on the doorstep, investors are likely to be nervous that cracks seen in the more than-eight year bull run in equities will turn into a steeper selloff.
"September is historically one of the most volatile months of the year," said Michael Purves, chief global strategist at Weeden & Co in New York. "Why do you want to chase the S&P right now if there's a good shot that September can be an ugly, volatile month."
On Thursday, the S&P 500 .SPX recorded its biggest daily percentage drop in three months, hurt by speculation about White House Economic Adviser Gary Cohn's possible departure, and failed to reverse course even after the White House said he was not leaving. Stocks edged higher on Friday.
The weakness came just as stocks were recovering from last week's swoon on worries linked to escalating tensions between North Korea and the United States.
The market is up more than 8 percent so far this year, fueled by hopes of bumper corporate earnings and expectations that the Trump administration's policies will spur growth. Yet the catalysts could be over.
"This wave of good news coming in the form of this double-digit earnings growth is in the rear-view window now and I think it's kind of hard to look out and see what's the catalyst to get buyers to jump back in aggressively," said Eric Kuby, chief investment officer, North Star Investment Management Corp., Chicago.
(For a graphic on historical performance of major U.S. stock indixes, click bit.ly/2whFbZC)
Cracks have started appearing in the market's relentless rally.
Thursday marked the seventh straight day in which the NYSE and Nasdaq had more stocks making new 52-week lows than highs, the longest stretch since Trump's election.
At Thursday's close, for a rolling period of one month, 509 more stocks had fallen each day on average than risen, the largest skew to the downside since Trump took office. When the market closed at a record high on Aug 7, more stocks ended the day lower than higher.
"There are some cracks in market breadth," said Peter Cecchini, chief market strategist at Cantor Fitzgerald in New York, who said he has grown more cautious in recent weeks.
The S&P 500 is trading at 17.7 times expected earnings - down marginally from March, when it hit a high not seen since 2004 - a level many investors consider expensive and increasing the risk of a market selloff.
"When you're at these valuation levels in a lot of these names, it doesn't take much," said Stephen Massocca, senior vice president, Wedbush Securities in San Francisco.
History is against stocks: September ranks as the worst month for stocks, according to the Stock Trader's Almanac, producing an average price return for the S&P 500 of negative 0.5 percent.
Weeden's Purves cited factors such as the debt ceiling, seasonal patterns and a Federal Reserve meeting as reasons for caution and said he was recommending people buy hedges such as S&P puts.
The U.S. Congress will need to raise the nation's debt limit by early to mid-October to avoid defaulting on loan payments, the Congressional Budget Office said in June. But the specter of another potential clash has been raised even as Republicans control both Congress and the White House
The U.S. Federal Reserve's next meeting on Sept. 19-20 is also seen as a possible near-term risk factor for stocks. In minutes of its last policy meeting in July, released on Wednesday, the Fed reinforced expectations that at its next meeting it will announce when it will start to wind down its $4.2 trillion bond portfolio.
"Perhaps the biggest worry is the potential unwinding of global central banks' vast quantitative easing stimulus programs in the coming months," said Fawad Razaqzada, Market Analyst, Forex.com, in a research note.
Still, any pullback gives investors an opportunity to buy and investors are watching for those dips.
"This has been a 'buy on the dips market' and we do believe that pattern will hold. It's just a question of how big that dip is," said David Schiegoleit, managing director of investments, U.S. Bank Private Wealth Management in Newport Beach, California.

Clic here to read the story from its source.