U.S. Stock Exchange Warning Everyone Should Be Careful Now

U.S. Stock Exchange Warning Everyone Should Be Careful Now

Markets are taking a wait-and-see approach ahead of the PCE price index and Fed Chairman Jerome Powell's remarks due tomorrow. The market's steps are bound to be cautious, as the inflation data the Fed is paying attention to is forecast to be higher than expected.

In particular, it is noteworthy that institutions are in the midst of rebalancing at the end of the first quarter. The day before, Goldman predicted that the pension fund, which began profit-taking in the first quarter, would sell $32 billion worth of shares.

It's also worth noting that more and more investors are looking for profit-taking in the stock market, which has soared by nearly 30% over the past two quarters. However, it's also true that even if there's an adjustment, it's more likely to end at a short pullback or adjustment level than a deep decline.

So much so that the current market momentum is very strong. The consumer sentiment index released today at University of Michigan has a solid view of the U.S. economy, as inflation expectations have fallen and consumer sentiment has risen to the highest level in three years.

In particular, it is also positive that the market's upturn is increasingly moving away from broader markets, such as megacaps or large caps like Nvidia, and into smaller and mid-cap stocks. The recent upturn in the market suggests that the small and mid-cap index is showing a stronger performance, indicating that momentum is expanding.

However, it is important to note that semiconductors, which have led the market so far, are relatively weak and technology is below market revenue. It is a potential risk that inflation is coming as a threat to the market again, given that energy and raw materials are strengthening again, signaling a comeback in the reflation trade.