U.S. stocks ' five-year bull market faces turning point

The sly rabbit dies and the lackeys cook. After pulling the http://www.aliyun.com/zixun/aggregation/6385.html "> US economy out of the subprime mortgage crisis and the financial tsunami, ultra-low interest rates followed the pace of a broad (QE) exit, and also faced the fate of the Fed's abandonment. However, raising interest rates is easy, but it is not easy to raise interest rates without causing market shocks. The end of ultra-low interest rates could put a stop to the five-year bull market in stocks.

U.S. stocks boom

With the Fed's unprecedented QE and ultra-low interest rates, U.S. stocks have been on the hot ground for more than five years since the beginning of 2009. In Friday, the mark, the NA, and the Dow were closed at 2010.4, 4100.09 and 17279.74, respectively, to a low of 735 points, 1116 points and 7,062 Huangrugeshi respectively in February 2009.

Data show that by the end of 2013, the Fed has released nearly $4 trillion trillion in liquidity from the market by means of multiple rounds of QE, which will break $4.5 trillion by the end of this year.

"The US stock market has been in a bull market for years, because quantitative easing and ultra-low interest rates have led to an increase in the money supply and capital inflows into the stock market," said Shettay, dean of the Finance Institute at the Capital University of Economics and trade. In addition, even if the economic growth rate is low, but the structural contradictions are less, the quality of growth is still relatively high.

Unlike Japan, which has a weak recovery in the eurozone and a sluggish economy, the US economy has recovered well in the aftermath of the financial crisis, with growth of 2.5%, 1.6%, 2.3% and 2.2%, respectively, in 2010-2013. After a brief setback in the spring Festival, the economic recovery is more pronounced, with a two-quarter growth of 4.2%.

Rate hike imminent

The recovery is driving the Fed's process of normalizing monetary policy. At a recent meeting held in September, the Fed has outlined its roadmap for future interest rates more clearly and has accelerated the pace of interest rate hikes: if not, the Fed is likely to raise interest rates for the first time next year, raising the federal funds rate to 1.25% to 1.5% by the end of 2015 and rising to 2.75% by the end of 2016- 3%, the end of 2017, the full realization of the normalization of monetary policy, interest rate remained at 3.75%.

"The Fed's monetary policy has a strong sense of purpose, and its policies are bound to be ' duly diverted ' as the economy recovers. In theory, interest rates are inversely proportional to equities, especially given that the U.S. stock market has been bullish for years, not only with the pressure of a pullback, but also with increased sensitivity to policy, "Shettay said.

In the context of interest rate hikes, the end of the U.S. stock market will arouse outside discussion.

Shettay stressed that there are many factors affecting the stock market, the most fundamental is the macro-economic situation and future expectations, and the Fed's rate hike is a step by step, so the future of the stock market needs to be observed.

But there was never a sound in the noisy stock market. Especially after entering this year, the bull market has been going on for five years. According to statistics, the bull market has typically lasted less than four years since 1932. Some voices believe that if the history of the guide, then the current bull market is afraid to come to the last paragraph.

The danger signal of a super IPO

And, a big signal at the apex of the bull market, its prosperity seems to be "――ipo". The company reported that 188 companies have been listed in the United States this year, with a total financing of $40 billion, up 44% per cent, and a full-year increase of more than 80 billion dollars, up 46%, the highest since 2000.

Alibaba, a Chinese company, listed on the NYSE in Friday, rose 38% per cent on the day, creating the largest IPO in U.S. stock history with $21.8 billion trillion in funding.

In some voices, the IPO boom has tended to signal the peak of the U.S. stock market. The IPO of Goldman Sachs in May 1999 soon followed the dotcom bubble. June 2007 Blackstone IPO financing amounted to 4.75 billion U.S. dollars, shortly after the subprime crisis, the Dow plunged to early 2009.

At the same time, the super IPO has tended to underperform within a year. According to a Reuters analysis of 15 of Alibaba's largest IPOs, a year after the listing, 8 new shares recorded an average gain of 17%, but the increase was mainly driven by a rally of 2 stocks: ICBC and Japan's NTT DoCoMo rose by more than 100%. The overall performance median was only up 4.1%.

In general, Shettay said, a large IPO usually chooses to go public when the stock market is hot, because the market may not accept it or sell it at a good price, and regulators may not approve it. But the hottest thing in the stock market may also be a moment of inflection, which requires investors to be calm.