More of the same: Financial markets remain nervous about AI stocks

MANY pensioners and investors in South Africa over the last two weeks became nervous and worrisome as share prices on the JSE moved weaker. Pessimistic views of an expectation of a strong and downward correction in equity prices surfaced amongst the public.

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MANY pensioners and investors in South Africa over the last two weeks became nervous and worrisome as share prices on the JSE moved weaker, says the author.

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Goldman Sachs CEO David Solomon warned this week of a "likely" 10-20% drawdown in equity markets at some point within the next two years, while the International Monetary Fund and the Bank of England have both sounded the alarm bells.

One almost gets the impression that the old saying of greed of the last ten months is quickly replaced by fears of big losses. Long-term strategies are quickly forgotten as asset prices undergo healthy corrections and adjustments.

As uncertainty prevails on the next step for interest rates both in South Africa and in the US, the JSE underwent a week of fluctuating sentiment, that range between fear/caution at the beginning of the week, a strong rebound by Thursday, just to remain negative again on Friday.

These patterns were driven mostly by weaker resources stocks as the price for precious metals seesaw through the week.