Breaking News: Global Equities Plunge as US Market Hits Lowest Closing Price Since May
Global equities took a significant hit on Monday, with Japan and the US market each plummeting, pushing the latter into bear market territory. The US market fell 3% to 5,186, the lowest closing price since May. Disappointing economic data has dashed “soft landing” expectations, leading to an aggressive repricing of Federal Reserve policy. Citi strategists predict consecutive 50 basis points rate cuts in September and November to support a slowing economy.
Longer-term bond yields have also responded, with US yields notably lower than their April peaks. Citi highlighted that its Bear Market Checklist suggests buying into market weakness, but they prefer to wait for evidence of a more complete positioning unwind and stabilization in earnings momentum before doing so.
In response to the current market conditions, Citi has increased the defensiveness of its global equity strategy, upgrading the US to Overweight and the UK to Neutral. They have also upgraded global Communication Services to Overweight and Consumer Staples to Neutral. For those concerned about continued volatility, strategists suggest that cheap defensiveness can be found in the UK.
In conclusion, the recent market turmoil highlights the importance of staying informed and being prepared for potential shifts in the financial landscape. It is crucial for investors to carefully assess their portfolio and consider adjusting their strategy based on expert analysis and market trends. By staying proactive and adaptable, individuals can navigate uncertain times and protect their financial well-being.