Today, Wall Street opened higher after the biggest selloff in almost two years. The S&P 500 index gained 0.36%, the Nasdaq was up 0.4%, and the Dow Jones industrial average opened 0.04% higher. However, this recovery is still muted given the recent losses in the market. $6.4 trillion has been erased from global stock markets in the last three weeks, with warnings that the recent correction may not be enough.
Goldman Sachs has cautioned that valuations are still high, with the stock-market correction not going far enough. They noted that while valuations have moderated, they remain elevated, particularly in the US. Despite recent moves, global equity markets are up 20% since last October lows, and the Nasdaq is up 8% this year. The current price/earnings ratio for the S&P 500 is still above 20x.
In other news, economic optimism among Americans has picked up slightly, but investors are gloomier. The RealClearMarkets/TIPP Economic Optimism Index rose, but confidence in government economic policies has dropped. JPMorgan also warned that the recent selloff may have more room to run, particularly in carry trades.
Overall, stocks are pushing higher on Wall Street, with the S&P 500 up 1% and the Nasdaq gaining 0.9%. While there are positive signs in the market, experts caution that the volatility may continue. In the bond markets, US Treasury yields are rising slightly, indicating a return to normal conditions with the yield curve close to “un-inverting”.
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Photo credit www.theguardian.com
