Posted 4/5/2024, 2:14:03 PM
Rising Rates Signal Stock Market Correction May Be on the Horizon
- Real interest rates are rising while S&P 500 continues to rally, creating a divergence that is concerning
- Two scenarios real interest rates fall to justify stock valuations or stock market corrects significantly (10-20%)
- Likelihood of more Fed rate hikes has increased recently based on economic data
- Technical indicators (e.g. VIX) suggest a stock market correction may be imminent
- Author believes a 10-20% correction is needed to reduce overheated, overbought conditions before any further rally
