I have been saying Bitcoin’s decline was a warning to the stock market, I think I was right, stock markets are now at a critical turning point. Bitcoin was the first to turn down, the weakness in the S&P 500 continues, the FTSE 100 has already turned down. This time it looks like the FTSE is leading the way, it turned first, now the S&P is following. The US stock market is experiencing a bearish tilt amid heightened volatility, driven by profit-taking in overvalued tech stocks, uncertainty around Federal Reserve rate cuts, and anticipation of key data releases. The recent end of a prolonged government shutdown has unlocked delayed economic reports, but private-sector indicators point to lukewarm growth, dampening enthusiasm.
Like in 2000, people remember that even the best and most promising tech companies declined 50% or more before they went on to become some of the largest companies in the world. It shows you that markets can decline when the long term prospects are good. It also shows that nothing is guaranteed, November is generally a positive month for stocks, not this time. Investors are rotating out of AI-driven mega-caps toward value sectors like financials, industrials, and small-caps, which have outperformed year-to-date. They are also moving into cash as safe haven gold is declining too.