Perfect Storm Threatens Bull Market after Rallies on Fed, Trade Talks

Perfect Storm Threatens Bull Market after Rallies on Fed, Trade Talks

Investor expectations of Fed rate cuts and a U.S.–China trade deal have sent stocks surging within a hair of their all-time highs. Instead, a perfect storm is brewing that could hammer equity markets in the second half of the year as four major headwinds gather strength, including weaker than expected earnings, a halt to massive stock buybacks, fewer than expected rate cuts, and growing turmoil from Brexit and other convulsions in Europe, according to macro strategist David Deluard at INTL FCStone, per a detailed story in Business Insider. “Rate cuts, a fairly resilient economy, high earnings beat rate, and the recent pullback of valuations will convince some investors to buy the dip,” wrote Deluard in a note to clients.