How is it possible that the Bags, and in particular the American ones, continue to collect record after record with the indexes S&P and Nasdaq composite despite the presence of a very complicated war like the one in which Donald Trump he slipped in Iran? It is an intelligent and intriguing question raised in recent days by Wall Street Journal which, in its simplicity, highlights what appears to be a clear paradox. Obviously, nothing lasts forever, and stock market volatility prompts caution. However, from the reflections of analysts and strategists, at least three reasons emerge that help explain the incredible anomaly in stock markets, especially in America they grow even if the GuerraHe hasn't found a solution yet, and no one knows whether, despite Trump's wavering optimism, he will be able to find one in the short term.
The first reason explaining the stock market's rise is precisely linked to the war and the market's bet on its outcome. The market isn't always right, even though it usually tends to anticipate events in the near future. And the stock market's current reasoning is based on the assumption that, if he doesn't want to sink even further in the polls and inevitably lose the November midterm elections, Trump will do everything he can to escape the labyrinth he's gotten himself into in Iran and reach peace with Tehran as quickly as possible. Naturally, the outcome of the standoff between the US and Iran also depends on the Iranians and on who—moderates or extremists—will win the ongoing battle within the Tehran regime. But Trump will do everything he can to end the conflict, and the markets are rising, betting on this possibility. But there's more.
The second reason for growth of Wall Street and the Nasdaq is the enormous weight that the American stock exchanges have Magnificent 7 and more generally, the entire high-tech sector, especially those companies that are betting most and investing most in artificial intelligence, that promise stellar profits, and that are relatively uncorrelated with the macroeconomic horizon. So far, high-tech has guaranteed and suggested steadily growing profits for the future, but the ultimate test will come in the coming days with the presentation of the US quarterly results.
Finally, the third reason for the growth of the stock markets, especially the American ones, is based on the role of the automatic trading The increasingly popular passive ETFs that invest based on algorithms geared towards bull markets. A bet on a quick peace in the Middle East, a bet on the beneficial virtues of high technology and AI, and the growing role of automated trading on the stock market: so far, they've sent Wall Street soaring. We'll soon see if this is a resilient trend or if the bulls are destined to retreat from the stock markets.
