Stocks are 'heading for a major fall' that will boost bonds, says Capital Economics
A downdraft in the AI trade recently dragged equities lower. The selling pressure may not be over just yet, according to Capital Economics.
TL;DR
- The Nasdaq Composite experienced its worst weekly drop since June, falling over 4%.
- Concerns over memory chip oversupply and AI companies' debt financing are impacting stocks.
- Capital Economics predicts the S&P 500 could fall to 6,500 by the end of next year.
- The economist expects a decline in the 10-year Treasury yield to 4.25% by the end of 2027.
- This outlook contrasts with some firms that believe the tech selling pressure is abating.