WALL STREET WARNING: The three reasons the US stock market could be about to CRASH
AMERICA’S top stock index the S&P 500 is on the cusp of a major market crash, many investors fear.
By LANA CLEMENTS
Express.co.uk
Tue, Aug 22, 2017
Overvalued stocks are creating a dangerous bubble which could soon burst, experts believe.
Markets have already been hit in recent weeks, with the S&P down to about 2,425 from a record of 2,476.
But it is feared a far bigger slump is now brewing, with stocks set to lose billions of pounds in value in a market correction.
If the S&P 500 keeps gains made in 2017, the annual return will be positive for the ninth year in a row, according to Capital Economics.
The only time the index has seen such a winning streak was just before the dot com bubble burst.
Furthermore, on the Shiller cyclically-adjusted price/earnings valuation, the ratio is higher than it was in all but one of 12 crashes since 1929.
It is feared Donald Trump could inadvertently trigger a plunge.
The US president promised major tax and economy reforms at the start of his presidency, which helped propel US stock markets to record highs.
But Mr Trump’s leadership has since been rocked by turmoil, including fears of nuclear war with North Korea.
And the president’s failure to pass major healthcare reforms could mean he will struggle to push through the rest of his agenda.
At the same time, America’s central bank the US Federal Reserve is raising interest rates, which can limit stock market increases.
However, not all experts believe a crash is pending.
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