According to Bloomberg, futures indicate a potential drop of at least 0.5% in Tokyo, Hong Kong, and Sydney markets after the US benchmark ended its eight-day winning streak with a slight decline. Matt Maley from Miller Tabak commented that it would be “healthy” for the equity market to take a brief pause, noting that “no market moves in a straight line.” The recent rally has been driven by market flows, positioning, and bets on policy decisions in Asia, where policymakers in Indonesia and Thailand are expected to maintain current interest rates.Market analyst Wantrobski expressed concerns about the current bullish sentiment, suggesting that the market is vulnerable to a liquidity event. He warned of a potential ‘bull trap’ but hoped to be proven wrong. Meanwhile, Rubner, who accurately predicted a late summer correction and advised reducing exposure to US stocks in late June, has turned tactically bullish. He believes that current market positioning and flows will support the market as sellers have exhausted their resources.Rubner also noted that strong price momentum and sharp reversals, as seen in the past month, are typical features of modern financial markets. He suggested that these conditions could signal the beginning of a ‘soft landing’ for the economy, although he acknowledged that there is no guarantee the Federal Reserve will successfully navigate this scenario. However, he emphasized that the necessary conditions for a soft landing appear to be in place.
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