There are big cracks in a $7 trillion bull case for stocks to keep rising

Rate this post

Wall Street's sign on a cash pile — Pixhook / Getty, Mbbirdy / Getty, Tyler Le / Bi

Bullish Statergists often quotes a record $ 6.9 trillion in money funds as a potential fuel for reserves.
But the increase in the cash market can be due to the fact that investors are waiting in the pile.
Possible DIP buyers still do not see any transaction, as the stock exchange decreases the anxiety about the anxiety to repay economic growth.

Wall Street Strategists have been pointed out last year The main reason Shares are likely to continue to push higher. Cash mountain next to.

According to the Bank of America, there is a record $ 6.9 trillion in the money market funds. Theory goes that soon as the stock exchange sees a convincing drop, investors are in a hurry. They install their cash and preventing any decline from control spiral.

In September, the idea was steamed when the Federal Reserve began to cut interest rates that keep cash. Hope was that the profitability of safer assets came down, the investors returned to the stock market and stimbed a fresh race of achievements.

But if the bulls hope “Money Wall” To save the stock market, they can handle their thinking during its next big sales.

That’s why.

The problem with this BIF’s bull thesis is that most of the increase in money market assets is due to the decision of investors in terms of monetary optimization according to infrastructure capital advisers.

“During the growth of money market assets, the level of M1 level, which included checking accounts, but not money market assets that fell by more than $ 2 trillion, noting that the bifhild is bifillation.

In other words, investors have used 5% cash income by transferring their money from low-yield bank verification accounts and transfer it to money market.

As long as the cash yield does not collide zero, it is unlikely that the cash in the borders will look for other investment opportunities.

And even if the yield lasted 0%, it probably means that the economy has problems, in which case investors do not want to move their risky cash to more volatile assets of shares.

According to Larry Tentareli, the main technical strategy of the daily trilling of the Blue Chip, the record $ 7 trillion dollars is so impressive, at least on a relative basis.

The data analysis of the loan has shown that cash market cash is stable as a percentage rate of the total capitalization of the S & P 500 market.