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S&P 500 FUNDAMENTAL FORECAST: BEARISH

  • The S&P 500[2] index may retrace further amid a Treasury-Fed spat while Covid-19 is taking a toll on the jobs market
  • US weekly jobless claims climbed for the first time in five weeks, reflecting weaker sentiment
  • Trading at 27.9 times price-to-earnings (P/E) ratio, the index’s valuation appears to be stretched
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The global economy is heading towards an uneven road of recovery next year, according to the IMF’s latest forecasts. In the US and Euro[3] Area, where the pandemic is resurging at an alarming pace, growth momentum is likely to slow down in the winter as more stringent and wider lockdown measures dent a fragile recovery. The good news is positive development on the vaccines front, with several large pharmaceutical firms moving closer to get regulatory approval for emergency-use authorization after their final clinical trial results showed impressive success rates. The critical question about how durable the vaccines are, however, has yet to be addressed.

The IMF projected a historic global GDP contraction of 4.4 percent in 2020, followed by a 5.2 percent expansion in 2021. The organization also advocated for stronger policy action to combat growth uncertainty, in view of several headwinds including virus-related travel restrictions, potential hurdles for manufacturing and distribution of vaccines in large quantity and persisting social distancing measures. More than 2 million coronavirus cases were reported in the US over the past 14 days, marking a record high.

Last Thursday, Treasury Secretary Steven Mnuchinsaid that he won’t extend several emergency lending programs, which were run by the Federal Reserve, beyond this year. The Treasury Department also asked the Fed to return unused funds, which could prevent the incoming administration of President Elect Biden from

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currensceneFLOGO WHTsquareThough not the oldest form of currency, some form of shell money appears to have been found on almost every continent. The shell most widely used worldwide as currency was the shell of Cypraea moneta, the money cowry.

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