- Investors are worried about the political uncertainties of the country
- Shareholders are now preparing to shift their portfolios to European markets due to the drop off in the markets
- Covid crisis and turbulence in the political fronts to be the major driving force for the decisions
- Stock investors are looking beyond present conditions toward what will happen in the future
A great time or troubled time?
Even after displaying mild growth in the stock markets during the month of July, investors in the United States are worried about hitting a difficult chapter. The share market has witnessed a substantial recovery in equities which might come to an end due to the diminishing economic figures and rising political instability.
Many investors who brought beaten down-stocks earlier this year were convinced that profits have diminished for the same. Other investors said that they see greater opportunities in the European markets than in the domestic stocks due to the declining Covid cases in the region and are thus managing their portfolios accordingly.
Disconnection between stock and economy
The traders have realised that the current prices are too complacent on the pace of economic recovery and policymakers would have much less tools to support the economy if another wave of virus infection is to arrive.
When the stock market is diverging from the current economic situation, it is not necessary that stock prices will start to retrace soon. The surge in infection cases has taken a toll on traders’ sentiment. The market is still assessing whether the current stock prices are rising much faster than the moderate economic recovery. Investors are now closely paying attention to possible decline of upward momentum in the stock.
Majority of the states in the U.S. have now opted for reverse lockdown and are looking forward to reopening economies that were locked down to contain the infection virus from spreading.