Will the Stock Market Crash in 2023 or 2024? 7 Risk Factors
Overpriced Stocks, Inflated AI Shares
Both U.S. stock and bond markets seem reasonably valued entering November.
“Both markets have reacted to the Fed’s inflation battle and the transition to ‘higher for longer’ interest rates,” says Andrew M. Aran, managing partner at Regency Wealth Management. “Stock market results have been skewed by artificial intelligence-related stocks, while bonds have repriced to higher rates.”
Weaker Investor Sentiment
When investors see a tsunami of market impactors, they understandably become skittish.
“Corporate earnings have held up pretty well, but (there is) an increasing likelihood that slower demand and higher funding costs are weighing on their outlook,” Aran says.
Geopolitical risks are adding to that fear of further market downside. “Uncertainty always feeds fear, and with money market funds and short-term Treasury bills yielding 5% or more, many investors are choosing these safer alternatives,” Aran says.