“Equity Market Regime Model, the indicator developed by Bloomberg Intelligence, which follows the stock market and shows three phases – accelerated height (green), moderate height (yellow) and inheritance (red) – fell to the red zone” – writes Bloomberg.
Reminds that seven previous cases of this type were associated with average drop in the S&P 500 index by 5.6 percent in the next 12 months. Current Bloomberg indicator statistics are the first signal of this type since February 2022.
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The entrance to the Red Zone took place after 21 months of rating in the yellow zone. The unpredictable US trade policy has made investors debate whether the worst part of the sale has already ended.
“Either the global trade war will soon end and everything will resolve, or the sale of shares must deteriorate, and people will throw a towel before the situation becomes so bad that it will become an opportunity to buy,” comments the stock market strategist quoted by Bloomberg.
What does the S&P 500 index show?
The S&P 500 index is one of the most important and most important stock exchange indexes in the world, covering the 500 largest companies listed on exchanges in the USA. Represents about 80 percent capitalization of the entire American stock market, therefore it is considered a barometer of the condition of the US economy.
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The index includes companies from various sectors, including technological, financial, health or industrial, such as Apple, Microsoft, Amazon or JPmorgan Chase. The index is weighted in the market capitalization of companies, which means that larger companies have a greater impact on its value.
