Dear Reader,
Global and US stocks, especially, continue their march higher from the lows reached in March due to the coronavirus disease COVID-19 pandemic lockdown.
US stock market indices are very close to their recent record highs. If this stock market prices increase is really a bear market rally, it has gone on quite a bit. Personally, I think we are in for two WW-shaped recovery with bounces and troughs. I forecast global stock markets will end the year 20% lower compared with the beginning of 2020 measured by the main indices in USA, Europe and Asia. The coronavirus disease will most likely return in the winter of 2020 and stock markets will fall again.
Up until October, though, global stock markets could very well go on and increase further. The biggest beneficiaries from this short-term rally will most likely be technology companies, which have already benefitted disproportionately from the coronavirus chaos. Especially big technology companies like Microsoft, Apple, Amazon, Google and Facebook. Up and coming technology companies like Zoom Video, Spotify, Snap and Pinterest could also record large increases in their stock market capitalizations in the next 4 months.
I personally think stock markets, technology shares especially, are mid-term overvalued by 20% to 30%. But much depends on how the consumers will react and whether consumption levels will quickly rise to previous levels. Predicting human behavior is notoriously difficult, though.
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Petar Vladimirov
Posledovich is not liable for any investment losses incurred by reading and
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Respectfully yours,
Petar Posledovich
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