After the sharp fall, what do Wall Street futures say: the experts’ conclusions

Now with the news coming from Asiaperhaps more reassuring, the futures of Dow Jones are also rebounding as global markets begin to recover from the sell-off.

However, the situation doesn’t look so optimistic as can be seen from the European session. S&P 500 futures are up just 0.5%, Dow futures are up 0.8%, while Nasdaq 100 futures are up just 0.6%.

For its part, lEuropean stock markets turn initial gains into losseswith the Euro Stoxx 600 Index now down 0.2%. There appears to be no specific novel catalyst behind the less positive tone, rather it is a sign of underlying unease following recent sharp moves. Meanwhile, The VIX index, the S&P 500’s volatility gauge, is also coming off session lows.

Following Monday’s historic session, experts have drawn some conclusions that could help keep a cool head in moments like those experienced in recent sessions.

There appears to be no specific news catalyst behind the less positive tone.rather, it is a sign of underlying unease following recent sharp moves. The VIX index, the S&P 500’s volatility gauge, is also coming off session lows.

Conclusions of the session to forget

From JP Morgan aThey say that “we remain cautious on stocks, waiting for the ‘bad is bad’ phase to set in and for stock markets to weaken as bond yields fall” (something that is already happening now following weak data from the US and Eurozone).

“In this context,” they point out, “risky operations are not carried out, since this is the opposite of recovery,” so they advise taking refuge in “purely defensive values.”

According to the forecast, European stock markets will continue to be under pressure due to “the slowdown in activity” shown by the PMI indicators, as well as “lower expected corporate results, the fall in bond yields” and “high geopolitical risk”.

On the other hand, they argue that “the VIX (volatility index) has not had an adequate capitulation for some time and credit spreads are extremely narrow.” In this sense, they add that “the Federal Reserve will begin to relax its policies, but in a more reactive way and in response to the weakening of growth, that is, it is likely to be behind the curve; and this might not be enough to trigger a rebound” in the stock markets.

In his opinion, “one should be cautious” with regard to European stock markets, although he adds that “towards the end of the year an opportunity will present itself to adopt a bullish attitude.”

Nikkei rebounds, but remains in bear market

Most Asian stock markets rallied on Tuesday, with Japan’s benchmark Nikkei 225 index leading the way. The Nikkei rose 10% on Tuesday, helped by discounted buying as investors flocked to stocks with solid fundamentals that are likely to benefit from lower interest rates in coming months.

However, The Nikkei is still in bear market territory after falling 12.4% in the previous sessionits worst day since the Black Monday crash of 1987.

Despite this, the recovery in the Japanese markets is still “a bit far”with markets likely to trade flat in the near term before gaining enough confidence for a recovery, analysts said. Citi. The short-term outlook for Japanese markets remains bleak, with Wall Street banking giants forecasting moves towards defensive assets will dominate. The brokerage recommended defensive sectors in the short term.