According to ChainCatcher news, reported by Jin Ten, history may be about to repeat itself. The well-known 'prophet' and head of the Swiss consulting firm Zulauf, Felix Zulauf, elaborated on his typically stern Swiss perspective on global markets, which always serves as a valuable counterpoint to the inevitable optimism of most Wall Street prophets.
Currently, Zulauf believes the market will continue to rise. He acknowledges the widely publicized technical negatives in the stock market—such as extremely optimistic sentiment indicating that investors are fully invested, with almost no new buyers. At the same time, market winners continue to be concentrated in large tech companies, and the deterioration of market breadth is also a warning signal. However, he believes that positive liquidity trends should continue to drive prices higher.
Felix Zulauf also stated that exchange rate fluctuations will have a negative impact on the stock market, and consequently, on the U.S. economy. The traditional view holds that the stock market is driven by the economy, but he believes that this relationship has reversed. The rise of the stock market and cryptocurrencies has strengthened consumers' balance sheets, allowing them to reduce savings and increase spending. Meanwhile, the U.S. labor market is in high demand, pushing up wages—while strong asset prices enable more Americans to quit their jobs and enjoy early retirement. However, a reversal in the stock market would have negative effects.
I have spent a lot of time in Florida, and I know many wealthy and strong-balance-sheet people,” Zulauf said. “I can tell you that if the market drops by 20%, they will cut back on spending and reduce expenditures. I have seen this in the past, and it will happen again in the future.” He added that, meanwhile, the poorer population, who have relatively fewer assets and tight balance sheets, accounts for a much smaller proportion of spending.