[US Stock Market Bottom Debate] "Summer Rally Is Coming" Expectations

[Asia Economy New York=Special Correspondent Joselgina, Reporter Minji Lee] The debate over the ‘bottom’ of the U.S. New York stock market is heating up again. As major indices, which have continued to decline since the beginning of the year, rallied for two consecutive trading days supported by corporate earnings, expectations and caution about the so-called ‘summer rally’ are pouring in together.

On the 20th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed up 0.15% from the previous session. The large-cap focused S&P 500 index and the tech-heavy Nasdaq index rose 0.59% and 1.58%, respectively. The Chicago Board Options Exchange (CBOE) Volatility Index (VIX), known as Wall Street’s ‘fear index,’ fell to the 23 level, marking its lowest point since the end of April.

This reflects the impact of major companies’ earnings, including Netflix and Tesla, exceeding expectations, lending weight to the bottom theory that the prolonged stock price decline may have hit its lowest point. Steve Sosnick of Interactive Brokers said, “The skeptical view that has dominated investor sentiment has already been reflected in stock prices,” adding, “If decent corporate earnings continue as they are now, investors are likely to start buying.”

It is explained that despite persistent inflation and concerns about economic slowdown, risk asset preference sentiment is reviving. Following Ed Yardeni, chairman of the well-known Wall Street investment firm Yardeni Research, Jason Goepfert, founder of Sentimentrader, also declared on the same day that “the bear market is over.”

The domestic stock market is also gaining momentum for the bottom theory. Although the KOSPI fell to the 2270 level on the 4th, it has recently been attempting to settle around the 2400 mark.

However, there are also opposing views urging caution. The recent rally may also be a rebound within a bear market. Ultimately, the future direction of the stock market is expected to fluctuate violently amid deep uncertainty depending on central banks’ key interest rate decisions and major indicator announcements worldwide.

This content was produced with the assistance of AI translation services.