With oil prices stabilizing, U.S. stock indexes rebounding and volatility on the decline, things are looking a lot better for investors than they were just a couple weeks ago. However, I doubt I’m alone in my sneaking suspicion that the recent sharp pullback was only a hint of what might be in store. Despite the current strength in stocks, some bearish risk factors are lurking. And these could converge relatively soon to precipitate a massive selloff that brings the S&P 500 down by 15%, 20% or maybe even more. #-ad_banner-#Ironically, some of the things that could contribute to such an… Read More
With oil prices stabilizing, U.S. stock indexes rebounding and volatility on the decline, things are looking a lot better for investors than they were just a couple weeks ago. However, I doubt I’m alone in my sneaking suspicion that the recent sharp pullback was only a hint of what might be in store. Despite the current strength in stocks, some bearish risk factors are lurking. And these could converge relatively soon to precipitate a massive selloff that brings the S&P 500 down by 15%, 20% or maybe even more. #-ad_banner-#Ironically, some of the things that could contribute to such an event are usually considered positive — like solid (if unspectacular) domestic growth. According to the International Monetary Fund, U.S. gross domestic product is on pace to climb 2.2% this year and should accelerate to 3.1% in 2015. What’s more, the slowdown in China may not be severe enough to hinder growth for the United States and the rest of the world. In the third quarter, China’s GDP actually rose at an annualized rate of 7.3%, beating calls for 7.2% expansion. The second quarter’s 7.5% growth rate was strong, too. Clearly, though, China is transitioning to slower growth after years of… Read More