About the Video
Here are the 3 MAIN RISKS you need to know about the S&P 500 (and the US Market) because things can get ugly really quickly in these uncertain times.
🔴 𝗦𝘁𝗮𝗿𝘁 𝗜𝗻𝘃𝗲𝘀𝘁𝗶𝗻𝗴 𝘄𝗶𝘁𝗵 𝗜𝗕𝗞𝗥 ➡️ Click Here
⬇️Timestamps:
0:00 → Intro
1:01 → Risk 1 – US Fed’s aggressive rate hike
3:23 → Risk 2 – Potential collapse of the US Dollar
5:48 → Risk 3 – Currently trading at a record high valuation
7:46 → Conclusion
Federal Reserve Chairman Jerome Powell affirmed the central bank’s determination to bring down inflation and said that aggressive rate hikes are possible as soon as next month. Powell’s statements essentially meet market expectations that the Fed will depart from its usual 25 basis point hikes and move more quickly to tame inflation that is running at its fastest pace in more than 40 years, fueled by the ongoing Russia-Ukraine conflict, Shanghai covid lockdown, US labor shortage and the excessive quantitative easing (QE).
Ever since the launch of QE, worried investors have asked: “Will the U.S. dollar collapse?” The root of any collapse stems from a lack of faith in the stability or usefulness of money to serve as an effective store of value or medium of exchange. As soon as users stop believing that a currency is useful, that currency is in trouble. This can be brought about through improper valuations or pegging, chronic low growth, or inflation.
At the same time, ‘Big Short’ investor Michael Burry warns US stocks are heavily overvalued and poised to tumble as the Shiller PE ratio for the whole of the S&P 500 has stood above 30 points since the beginning of the year, clearly suggesting it is way overvalued compared to the average 17 points. Based on the Buffett Indicator (the ratio of total US stock market valuation to GDP), it is currently 45% (or about 1.5 standard deviations) above the historical average, suggesting that the market is significantly overvalued.
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