New S&P 500 High Masks Warnings of Economic Recession

The massively-bullish market belies deeper fundamental concerns that are leading to warnings from industry insiders. International markets have not followed suit — and a history of deep corrections after highs and unconventional monetary policies may mean a serious economic recession is looming for the stock market.

Is the US Stock Market an Exception?

When it comes to international markets, there are no exceptions. This current bull run for the S&P 500 has not been followed by the international markets. In fact, much of the rest of the world is still seeking to reach the previous peaks seen in 2018. What’s more, even as the all-time high was reached, the international market did not track with it. In fact, Japan’s Nikkei lost 0.4 percent and Hong Kong’s Hang Seng dipped 0.7 percent. The Shanghai Composite climbed 0.1 percent, while Europe followed suit with most markets opening at close to one percent lower. After globalization in the late 20th century, international markets are generally closely linked. When one stock market moves, other international markets generally follow suit — as economies work together, either positively or negatively. With the world lagging behind, it seems relatively clear that the global market is moving toward recession and the US economy is simply overly optimistic. [bctt tweet=”With the world lagging behind, it seems relatively clear that the global market is moving toward recession and the US economy is simply overly optimistic.” username=”beincrypto”]

Strong Earnings or The Fed?

The stated cause for the US stock market boost was a response to a strong earnings season. Coca-Cola, Lockheed Martin, and many others beat expectations. In fact, 78 percent of reports beat forecasted earnings. However, while current earnings are strong, others feel the market is being buoyed by Federal Reserve policies. Having stopped the tightening process to produce a ‘soft landing,’ the Fed may have underestimated the growth — which may lead to substantial inflation.

Is Bitcoin at a Tipping Point?

Overall, while the market looks like a juggernaut, most analysts see weakening fundamentals as indicative of danger. What’s more, the Fed seems to be tinkering too much with things that may not have the desired effect. In fact, as the potential for an economic recession increases, the economy appears to be at a tipping point. When markets like this one appear, a single negative piece of news can sometimes spiral into a recession — as with the 2008 crisis. Investors have been moving toward safer and less centralized investments to protect value, even as the market begins to show signs of weakening. Bitcoin (BTC), as well as precious metals, are all options for value protection when stocks lose steam. At some point, hedging with store-of-value investments may be critical. Do you think investors will flock to Bitcoin (BTC) as the market begins to move towards an economic recession, or will stocks continue their bullish market growth? Let us know what you think in the comments below! 

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