The 3 events driving the ‘stampede’ in markets and the buying opportunities created

A note via Macquarie bank analysts pointing to opportunity in markets now.

Says Monday’s price action was ‘stampede’, citing a definition including “frightened animals or people run together in a wild and uncontrolled way to escape from something”.

Says the ‘something’ was a combination of:

• perception the Federal Reserve is behind the curve in cutting rates
• tech bubble concerns
• Yen carry trade unwinding

But, dismisses these:

• US economy can avoid a recession
• tech valuations are not close to bubble levels
• USD/JPY is back to levels last seen in late 2023, the fundamentals for the carry trade remain in place

Acknowledging the inherent nature of markets:

• stampedes are inherently unpredictable

But

• “we view it is closer to irrational, thus creating buying rather than selling opportunities”

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S&P 500 daily candles:

This article was written by Eamonn Sheridan at www.forexlive.com.