25.01.202113:11 Forex Analysis & Reviews: US stock market to face collapse very soon

Experts warn that Joe Biden's economic plan could drive the stock market to new heights, but that an imminent collapse will follow.

Analysts believe that within the next month, the stock market will be replenished with fresh money, and its participants will start making the last rash bets. Well, after that, a spectacular bubble rupture will happen. According to experts, there is no way to avoid it, because when this level of enthusiasm is reached on the market, the bubble always bursts soon after. And we are not talking about years, but rather months.

Analysts have little doubt that some of the new $1.9 trillion stimulus package will end up in the stock market, but unfortunately, that won't be enough to stave off a stock market crash. They predict the future stock market crash will be comparable to the crash of 1929 or 2000.

Experts doubt that today's S&P 500 ratios are based on the growth potential of the US economy, new technologies, or promising business models. Nor do they believe that the Federal Reserve will be able to contain the market crash by further easing monetary policy.

Today, the real profitability of the S&P 500 has dropped by 2% - to the indicators of the summer of 2018 and the end of 2020. Both of these episodes were followed by massive stock market crashes. December 2018 was the worst for the US stock market since the Great Depression, and the collapse of the S&P 500 in the spring of 2020 was the largest and sharpest on record.

The real return on the United States stock market is one such indicator that is causing serious concern today. After all, its fall below zero preceded the stock market crashes of 1987, 2000 and 2008. Accordingly, the dynamics of this indicator can be fully used as a valuable warning.