A respected Citi Research analyst advises savvy investors to keep calm despite increasing omens of a stock-market crash.
"Based on a set of quantitative factors, it's hard to conclude that a market crash is imminent; however, the risks are rising. In terms of the five metrics that we have used none are particularly worrying or suggest that investors should be worried," Citi Research analyst Chris Montagu wrote in a recent note to clients.
"There are a number of exogenous risks (e.g. rising yields) that together with high valuations and a market at historical highs, should keep investors alert," CNBC.com quoted him as writing.
However, "stock return volatility remains stubbornly low and doesn't suggest a narrowing market," he wrote.
He stressed that expensive valuations and monetary policy tightening are "causes for concern."
On Wall Street, U.S. stocks were lower as investors rushed to safe-haven assets after Trump's "fire and fury" warning to North Korea escalated tensions with the nuclear-armed nation.
North Korea said it was considering plans to fire missiles at Guam, a U.S.-held Pacific island, after President Trump's warning on Tuesday.
Trump followed his warning with a tweet on Wednesday about the strength of the American nuclear arsenal, but expressed hope it would not need to be used.
Trump's comments sparked a late afternoon selling on Tuesday, with the Dow ending a nine-day streak of closing records.
"Geopolitics splashed cold water on the markets," said J.J. Kinahan, chief strategist at TD Ameritrade.
"There's uncertainty and caution as investors nervously eye the next foreign policy moves," he told Reuters.
"Despite all this, there's no reason to press the panic button. For now, the North Korea situation bears watching as there's lots of tough talk, but we'll see if it escalates," said Kinahan.
(Newsmax wires services contributed to this report).
© 2023 Newsmax Finance. All rights reserved.