Fairfax Business Blog Fasten your seatbelts: cracks are appearing in US equities, making Wall Street the likely next victim of the resurgent US dollar and volatility, Bell Potter’s Charlie Aitken warns. ‘‘On that basis I am going to issue a correction warning on US equities this morning,’’ Aitken is quoted on the Livewire financial platform. Aitken says consensus US earnings downgrades driven by the strong US dollar will be the catalyst for the correction. ‘‘When EPS downgrades come through in multinationals, large cap tech, and US oil majors in particular, which have heavy equity benchmark index weights, I think it will be the trigger for a multi-year profit taking correction,’’ he says. ‘‘I am again backing my market instincts on this and positioning for the now long-overdue Wall Street correction as the Fed ends QE and starts the process of cash rate normalisation.’’ Aitken currently on sees value in the US dollar, volatility and Chinese equities. These cracks in equity are inevitable as the Fed winds down QE and people get realistic about the onset of inflation etc.
Posted on: Thu, 02 Oct 2014 00:51:59 +0000
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