2 clear signs the stock market ‘endgame’ is approaching
Myles Udland
BusinessInsider.com
Apr. 29, 2016
Is this the top?
In a note to clients on Friday, UBS strategist Julian Emanuel suggests that a few signs pointing to the “endgame” for stocks are coming into view.
The basic outline is that once the Fed starts raising interest rates the wheels are set in motion for the stock market to go lower.
Emanuel notes that both the 2000 and 2007 stock market sell-offs have been preceded by a collapse in merger activity and a rotation into financial stocks and out of utility and consumer staples.
The same themes have been playing out in markets recently, and it has Emanuel nervous.
“And while age alone does not portend the definitive end of a Bull Market,” Emanuel writes, “the current rally, at 2,611 days, is now the second longest in modern history, behind only the 1990-2000 bull market.
“Yet the current milestone comes just as ‘Signs of The Top’ become clearer — a surge in M&A activity in 2015 exceeding the heady days of 1999-2000 and 2007 followed by a lull in deal-making catalyzed by extreme market volatility, ending in the largest quarterly rebound since 1933, from -11.4% to close the quarter +0.8%.”
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