“Ghosts 2007” and Graybeard ‘NIFTY 50’: Bofa looks at the rare situation in the markets and finds fateful similarities to GFC and Bubble Dotcom

At the same time, a separate research note of Bofa, by the strategy and quantity team, looked at another historical rhyme: between the CAP Mega stocks called “NIFTY 50”-Especially Nvidia And other members of “Seven Magnificent” – and the last time it surpassed the S&P 500 for many years. ((First 50 NIFTY The title was holding a group that lasted until almost 1973, when the game changed for the markets due to the beginning Great inflation And other factors, including Turn away from the golden standard))

The team, led by Savita Subramanian, wrote, adding that another is unforgettable by the 50 largest shares in terms of the maximum market was in the 1990s: “Mega-CAPS has advanced for seven years but was cracked in July,” wrote the team, led by Savita Subramanian, adding that another is unforgettable by the 50 largest shares in terms of the maximum market was in the 1990s. This was about six years, a similar period for the current market pattern.

The analysis of the du team indicates that the rapprochement of low policy rates and the acceleration of inflation is very rare, as only 16 % of time has occurred since 1973. Historically, central banks have reduced rates in response to decline in inflation, not high prices. The bank’s concern focuses on the possibility of price discounts this year to pay the so-called “real policy rate”-the average federal reserve for inflation. The report warns that such a move may weaken the US dollar, noting the amazing similarities with 2007, when the reduction of inflation driven by the Federal Reserve Bank led to currency fluctuations and the way for financial collapse.

Meanwhile, the Subramanian team suggested that NIFTY be 50 giving way to leading the broader market. Historically, dilution of the federal reserve, especially during the periods of sticky inflation, has led to poor performance by the huge caesals. Bofa analysts say, in the past, the small value -fired stocks exceeded the value, as it benefited from the cash transfer from the money market funds to the stocks with the start of risk -free returns.

Notes were written by different teams in the following days, where possible discounts in the Federal Reserve digested at comfort and many similarities in the last two major financial incidents in the past 25 years. Bofa certainly does not specifically connect these two directions to each other, and does not predict another imminent financial crisis. But the 2007 ghosts came back, and NIFTY 50 shows weariness.

What next?

The market condemnation to reduce the September rate Now runs near certaintyWith the possibility of discounting 25bps at the next federal reserve meeting, which is close to 100 %. This sharp shift follows the disappointing employment numbers in July and a series of reviews of previous job data. The markets are also betting on price cuts at least before the end of the year and predicting the FBA rate rate to less than 3 % by 2026. At the same time, Bofa models indicate that even the modest monthly height in CPI will maintain inflation on an annual basis, where excessive amplification has been overcome from excessive amplification of excessive amplification of excessive harmony Excessive amplification, where excessive harmony was overcome, where excessive harmony was overcome, where it was overcome. Shocks during 2007-2008.

The Howard du team also pointed to strong similarities in the foreign exchange market, where it has been reported that the US dollar has been tracking its weakest year since 1999 and moving more with 2007 more than any other year in half a century. At that time, the decrease in the decrease in the acute dollar rate before average for several months has only been kept with the real price recovery-where the currency markets may soon restore the re-experiment if the Federal Reserve continues as the markets expect. “While (the dollar) is on the right path of the largest general decline to the date since 1999,” according to the DU team, “work in 2025 is still linked to the highest association with 2007 since 1973.”

The American Special System Index in Subramanian, which turned into “recovery” in July, reflects fixed in August, previous courses in which smaller and value stocks, with high value and sector factors that excel over the large names of prominent margins. The huge infidels today, while the central market gains in recent years, now show the average growth and weak quality-which are reduced due to the decrease in free cash flow margins and less than high-class companies-which leads to an increase in their ability to rely on the evaluation premiums.

With low rates, BOFA expects valuable flows and shares directed towards profits, with investor strategies tend towards Russssell 1000 names that offer strong but not excessive profits. Also, in stocks of small value and value of low -proportions P/E and Beta are also the best performance, in both the neutral assessments of the and unrestricted sector. Meanwhile, continuous congestion and high assessments in growth names indicate the expansion of opportunities outside the growth of the Mega structure, where risk installments are pressured and market driving toured.

In short, Bofa’s double analysis provides a warning and road map: The imminent reduction in the federal reserve, which was placed against a rare background of accelerated inflation, calls for a risky historical precedent on the dollar and the stability of the financial market. At the same time, it appears that the stage is specific to a large rotation within American stocks, away from the huge beings towards the wider market sectors-will see the development investors closely as the Federal Reserve meetings are approaching in September.

If there is an accident to compete with the first first decade of the twentieth century or the great financial crisis of 2008, this will be a really different story.

For this story, luck The artificial intelligence is used to help with a preliminary draft. Check an editor of the accuracy of the information before publishing.

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