After hitting annual highs last week, the three major U.S. stock indexes could be in for a fall. Not a stumble, but a fall.
In an email, Stanley J.G. Crouch, CIO at Aegis Capital, said that we are likely to see a “massive correction” in all risk assets in the coming weeks. Highlights:
- A correction of 15% to 25%, with a rebound as the November elections get nearer, no matter who is leading in the polls
- Neither the Federal Reserve nor the European Central Bank will take “any sudden action”
- The euro will drop below 1.20 and may go as low as 1.00
- There will be a significant correction in commodities, with grains, industrial metals, and precious metals leading the way down
- Gold and silver will “‘give back’ considerably”
Investors have already begun to understand the limits the so-called “central bank puts” will have on restoring growth to the global economy and that what manysee as the real world with near all-time low shipping rates and declining real wages, among other factors, must be “seriously factored into the decline.”
The three major U.S. stock indexes are down somewhat today, with the Nasdaq off the most at down 0.7%.