Does the US stock market anticipate a downtrend?

After so many months of interrupted rises, the US stock market is giving the first signs that this scenario may have passed. To this end, not a few financial analysts believe that there is very little left to go short in the US S&P 500 index. Likewise, set the benchmark to exit this financial market and that it would be quantified at levels very close to the 2,700 points that would be the benchmark to start sales.

Another of the derivations of a change in the trend of equities would be its influence on the stock indices on the other side of the Atlantic and that investors from the old continent could bring losses of a certain intensity ether. Faced with this scenario, there is no choice but act with great caution and especially in a rational way and despite the fact that the months of November and December are traditionally very buyers. Where the long-awaited rally of the Christmas festivities makes an appearance.

In any case, the increase in the interest rate by the United States Federal Reserve (FED) can lead to these new worrying scenarios for equity markets. Fundamentally if interest rates rise more intensely than financial analysts predict. In which case, the losses could be accentuated from these precise moments. Not in vain, it is a risk that you must have if you are going to opt for buying shares on the stock market in a period as complicated as the current one.

Bearish trend in stocks

One of the big surprises in recent weeks is that stocks in the US markets are losing a lot of price in their valuation. To the point that trade positions investors are imposing crystal clear clarity on buyers. Where, a deep analysis in the technology sector can help to find one of the main reasons for the current downtrend in the financial markets of the United States. What happens in the next few days will be very important to choose in the end if it is time to buy or trade the positions on the stock market.

On the other hand, we cannot forget that equities in this geographical area have grown steadily for more than five years and year after year. This procedure may have reached the end and the values will be dedicated from now on to Put the price of their actions. At the moment it is not feasible to choose whether what is happening these days is a mere adjustment of the stock indices or on the contrary it is a movement much more worrying for the interests of small and medium investors.

S&P 500 Current Scenario

Whatever the case, there is one thing that can help investors make a decision one way or another. It is none other than the S&P 500 has started a great lateral movement that can last throughout 2019. Even though there may also be a radical change in trend if some of the most relevant supports of this important equity market are knocked down. To the extent that the most reasonable option is market or wait, depending on the status of your operations on this exchange in the United States.

On the other hand, the significant slowdown in China's economic growth and emerging countries, which also slow down German economic growth and, therefore, that of Europe, and their stock markets can exert a pressure factor on the different indices of the American stock market. Where it is expected for the S&P 500 that the average earnings per share of listed companies will decelerate to levels slightly above 23% in 2018, 6% in 2019 and at least in 2020, which would be around 4%. It is a scenario, whatever the case, with which it would be much more difficult to operate with these financial assets.

Trump's controversial explanations

The president of the United States, Donald Trump, has spoken out about these falls in the American stock markets. And his explanation could not have been more controversial for the different financial agents. His explanation is that these movements are generated as a result of the recent elections to the Congress of Deputies and Senate and that brought a greater presence of Democratic politicians to the first of the houses of representation of this powerful country.

Of course, these reasons are not very explainable when the day after these results were known, the stock markets received them with significant gains. Rather, the causes must be found in explanations derived from the financial markets themselves. Fundamentally those linked to a excessive tiredness by the stock exchanges of the United States. Now what will have to be detected is if this is happening is something more than a correction in the price of the securities.

Start in the stock market crash

It should be noted that the S&P 500 started the week going through a corrective stage of the previous rise, which went from 2,600 to 2,920 points. It is the US technology sector that is showing the biggest signs of weakness, highlighting its biggest declines in many months. This is a very powerful signal about what can happen in the next few days or weeks. Not in vain, the Nasdaq 1000 anticipates future movements of the more traditional indices, as has happened in recent years.

One of the most common advice from the most famous financial analysts is that as long as the S&P 500 remains below 2,800, the most profitable position will be to be in liquidity given the downward predisposition of these markets on the other side of the Atlantic. Therefore, these are critical moments to show what is the trend that will eventually emerge from all this. corrective or bearish procedure. Where monetary decisions can also contribute their grain of sand to opt for one or another trend from now on.

Background to the US Stock Market

The US stock market has caused one of the best periods of increases in its history and that has led to investors' capital gains reaching levels even very close to 100%. Where the revaluation of the most relevant index of this relevant market, the Standard and Poor's 500 has shown a rise above the 200% since 2009. In what is considered as the longer rise period of share prices in this geographic area. Well above the ratios shown by all the stock exchanges of the old continent.

In another vein, the divergence between the US and Spanish stock exchanges is more than evident. Therefore its potential for a decline in the stock market is much more evident, with deeper arrangements, both in its intensity and in the period that can last from these moments. Whatever the case, it is the period of greatest weakness since the uptrend began and it may lead to a much deeper turnaround than anticipated by some of the most relevant equity market analysts.

Stocks with the biggest falls in the US

The week could not have started any worse for US financial markets. Not surprisingly, Wall Street has started the week with heavy losses, led by a number of companies of particular importance, such as Apple, Amazon, Goldman Sachs and General Electric. Such has been the intensity of these depreciations that the Dow Jones has fallen by 2.3%, while on the contrary, the S&P 500 has depreciated to 2% levels. The technological index par excellence has fared much worse, which has plummeted by almost 3%.

Nor can the sharp decline in one of the most iconic stocks in the United States be ignored. This is the case of Goldman Sachs shares that have been left almost the 8% and achieve levels very similar to those of 2016. In this circumstance, fueled by the alleged bribes in Malaysia that have affected its valuation in the financial markets.

A fact that can contaminate other securities of the sector in the coming days and even the stock market proposals of this part of the continent. With very negative prospects for people who want to invest their savings. With a very negative effect on the futures market of the Asian markets, which sharpen their falls with great intensity. Where monetary decisions can also contribute their grain of sand to opt for one or another trend from now on.