History may soon repeat itself, as the well-known 'prophet' and head of Swiss Zulauf Consulting, Felix Zulauf, elaborated on his typically stern Swiss perspective on the global market, which always serves as a beneficial counterpoint to the inevitable optimistic speculations of most Wall Street prophets. Currently, Zulauf believes that the market will continue to rise; he acknowledges the widely publicized technical negative factors 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 deteriorating market breadth is also a warning signal. However, he believes that positive liquidity trends should continue to push prices higher.
Felix Zulauf also stated that exchange rate fluctuations will negatively impact the stock market and, consequently, the U.S. economy. The traditional view is 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, enabling them to reduce savings and increase spending. Meanwhile, the U.S. labor market is tight, pushing wages higher—while strong asset prices allow more Americans to quit their jobs and enjoy early retirement. However, a reversal in the stock market would have negative effects. 'I've spent a lot of time in Florida, and I know many wealthy people with strong balance sheets,' Zulauf said. 'I can tell you that if the market drops 20%, they will cut back on spending and reduce expenses. I've seen this happen in the past, and it will happen again.' He added that, meanwhile, the relatively poorer population, which has fewer assets and tighter balance sheets, accounts for a much smaller proportion of spending. (Golden Ten)