Source: Caixin.
Stifel, a US investment bank, emphasized the strong correlation between bitcoin and the Nasdaq 100 Index. The bank pointed out that bitcoin has fallen 10% since June 7, which is a warning to the entire stock market.
According to the latest report by Barry Bannister, the chief stock strategist of the American investment bank Stifel, Bitcoin has fallen by 10% since June 7, which sends a warning signal to the entire stock market. He emphasized that since 2020, there has been a strong correlation between Bitcoin and the Nasdaq 100 index because this cryptocurrency is more like a speculative risk asset than "digital gold." This year, with the help of the AI boom, technology stocks such as Nvidia and Apple have led the US stock market to soar all the way, repeatedly setting historical highs. However, the trading price of Bitcoin has fallen to around $65,000. Bannister warned that this indicates that the stock market will eventually fall as the cryptocurrency falls. "The recent weakness of Bitcoin suggests that the S&P 500 index is about to enter a summer adjustment and consolidation period," he wrote.
He believes that in the event of a summer correction, tech stocks like Nvidia that have risen sharply, which are showing signs of recording peak earnings according to analysts, will be hit the hardest. "According to past cycles, the leader (Nvidia) in the rise may lead to a third-quarter downward correction," he added. Recently, Katie Stockton, founder of Fairlead Strategies, also said she was tracking the growing difference between US technology stocks and Bitcoin. "As we see Bitcoin continue to fall and the Nasdaq 100 index continue to rise, we are somewhat concerned that it is only short-term. We do feel that the Nasdaq 100 index will eventually fall to eliminate this divergence. As long as people say, 'Wait a minute, Nvidia has risen too much.'"$NASDAQ 100 Index (.NDX.US)$On the other hand, the Federal Reserve may keep interest rates at a higher level for a longer period of time to combat persistently high inflation, which makes Bannister more certain that the US stock market is about to experience a sell-off. "We expect risk assets to experience a correction, as we believe that due to the still high inflation ('last mile' problem), the Federal Reserve will abandon its cautious dovish stance, exposing the S&P 500 index's overvaluation relative to financial condition indices and other indicators," he wrote. But in the end, Bannister also admitted that calling for a stock market correction now may be too early, and the bubble may not burst so soon. He predicts that American stocks may first rise another 20 percent and then experience painful selling.
The stock market may continue to rise before experiencing a more painful 20% decline. "Since the bubble in the 19th century, the S&P 500 index is likely to rise to about 6,000 points by the end of 2024, and then return to levels near the beginning of 2024 (about 4,800 points) about five quarters later, around the first quarter of 2026," he wrote.$NVIDIA (NVDA.US)$Led by major technology stocks such as Apple, the overall stock market has repeatedly hit new historical highs. However, the trading price of bitcoin has fallen to around $65,000. Bannister warns that this indicates that the stock market will eventually decline with the decline of this cryptocurrency.
"The recent weakness of Bitcoin suggests that the S&P 500 index is about to enter a summer adjustment and consolidation period," he wrote.
Recently, Katie Stockton, founder of Fairlead Strategies, also said she was tracking the growing difference between US technology stocks and Bitcoin. "As we see Bitcoin continue to fall and the Nasdaq 100 index continue to rise, we are somewhat concerned that it is only short-term. We do feel that the Nasdaq 100 index will eventually fall to eliminate this divergence. As long as people say, 'Wait a minute, Nvidia has risen too much.'"
"As we see Bitcoin continue to fall and the Nasdaq 100 index continue to rise, we are somewhat concerned that it is only short-term. We do feel that the Nasdaq 100 index will eventually fall to eliminate this divergence. As long as people say, 'Wait a minute, Nvidia has risen too much.'"
The Federal Reserve may keep interest rates at a higher level for a longer period of time to combat persistently high inflation, which makes Bannister more certain that the US stock market is about to experience a sell-off.
But in the end, Bannister also admitted that calling for a stock market correction now may be too early, and the bubble may not burst so soon. He predicts that American stocks may first rise another 20 percent and then experience painful selling.
"We expect risk assets to experience a correction, as we believe that due to the still high inflation ('last mile' problem), the Federal Reserve will abandon its cautious dovish stance, exposing the S&P 500 index's overvaluation relative to financial condition indices and other indicators," he wrote. But in the end, Bannister also admitted that calling for a stock market correction now may be too early, and the bubble may not burst so soon. He predicts that American stocks may first rise another 20 percent and then experience painful selling.
He believes that in the event of a summer correction, tech stocks like Nvidia that have risen sharply, which are showing signs of recording peak earnings according to analysts, will be hit the hardest. "According to past cycles, the leader (Nvidia) in the rise may lead to a third-quarter downward correction," he added.
He believes that in the event of a summer correction, tech stocks like Nvidia that have risen sharply, which are showing signs of recording peak earnings according to analysts, will be hit the hardest. "According to past cycles, the leader (Nvidia) in the rise may lead to a third-quarter downward correction," he added.
Bannister also admits that a stock market correction may not happen so soon, and the bubble may not burst for a while.
However, he predicts that American stocks may first rise another 20 percent and then experience painful selling. "19th-century bubbles suggest that the S&P 500 index is likely to rise to about 6,000 points by the end of 2024, and then return to levels near the beginning of 2024 (about 4,800 points) about five quarters later, around the first quarter of 2026," he wrote.
Bannister believes that the stock market may continue to rise before experiencing a more painful 20% decline.
"19th-century bubbles suggest that the S&P 500 index is likely to rise to about 6,000 points by the end of 2024, and then return to levels near the beginning of 2024 (about 4,800 points) about five quarters later, around the first quarter of 2026," he wrote.
Editor/tolk