According to Business Insider, the global stock market is bullish in 2023 amid the hype surrounding artificial intelligence (AI).
Although the bull market in stocks seems quite sustainable, this is a misleading impression. Experts at Ned Davis Research (NDR) say the US Federal Reserve’s policy mistake could pose the biggest threat to the bullish stock market. “If the Fed panics and cuts rates, a blow-off bubble peak would be possible,” Ned Davis Research said.
Experts seriously fear a collapse in the stock market due to this “blow-off bubble.” The latest 25% surge in the S&P 500 index from its mid-October 2022 low signals a long-term secular bull market.
It is important that the Federal Reserve makes no mistakes when it comes to interest rates, NDR reckons.
Earlier, analysts noticed that short cyclical bull movements tend to occur during secular bear markets and coming out of recessions. However, the current bull market shows that stocks have been in a secular bull market since 2009. It is too early to say that a secular bear market has begun, experts believe.
In addition, there is such a factor as a collapse in stocks in 2022 in the absence of a recession. This proves that the current bull market in stocks is more secular in nature than it is cyclical.
