What to expect after the best quarter for the S&P500 in 22 years? Well, in the short term there may be some fluctuation, typical of moments of greater uncertainty, with volatility remaining high, because we are now entering a period of lower volume that tends to exacerbate the intraday changes in assets. It is also necessary to take into account that the months of August, September and October are historically particularly active in terms of corrections, and this year there is an additional variable, the presidential elections in the USA, which promise to further sprinkle the market with motives of uncertainty and interest, not least because Trump has several themes on the table that he will certainly use in order to improve the possibility of being re-elected, such as the trade war.
But if the reasons for Bears can shine from here until the end of the year are several, the main issue will remain the same, liquidity. The enormous liquidity injected by central banks, now complemented by fiscal packages and direct aid to citizens and companies in the USA, which will hardly give room for any correction to be prolonged, which is not to say that it cannot be intense, as it happened in February. In other words, there is a strong probability that the new semester will end up like the second quarter, up and with Nasdaq at historic highs or close to it, while in the foreign exchange market and contrary to some noise that has existed about a possible crash of the US Dollar, the US currency is now a stronger asset than most other major currencies.
