Possible Declines Expected but Not Catastrophic
The stock market has experienced a somewhat turbulent start to the fourth quarter. The market indexes have shown signs of stagnation or slight declines in recent weeks, leading to concerns among some investors about potential total losses of up to 20% by the end of the quarter. Given the high volatility and fluctuating consumer confidence, there are worries that the market might be heading towards a bearish trend. Despite these concerns, some analysts are urging for caution, indicating that while the situation may not be ideal, a doomsday scenario is unlikely at this point.
“I don’t believe this will be the major downturn, the significant pullback leading to a 20% decline and entering bearish territory,” stated D.R. Barton, principal at Woodshaw Financial Group, in an interview with Yahoo Finance. “There are several reasons for this perspective, but the primary one is the abundance of available capital. This factor supersedes other negative news, which I believe will continue to support the market for the time being.”
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“While there are lingering concerns,” Barton continued, “what I’ve observed repeatedly is that with each pullback, market participants hesitate saying, ‘I don’t want to miss out if there’s another significant uptrend.’ I anticipate we’ll witness one more major surge before any substantial correction occurs towards the end of the year.”
“It’s important to note that the increase in bond yields typically signifies anticipation of economic growth, which is generally positive for the market. A gradual rise is favorable, while a sharp increase is less favorable for the equity markets,” Barton further explained.
