Will the Stock Market Crash?

It’s been a spectacular bull run for the S&P, Dow Jones, NASDAQ for the last 5 years and more, but will the markets give it all back.  Is the global tariff battle going to crash the US, European and Asian stock markets.

Today, April 7th, most of these exchanges/indexes started down 3 to 6% on top of big losses late last week but right now, they’re rocketing back upward. This whipsawing on the heals of Trumps statement today, should shake markets from Europe to Asia to North America. This might be more than volatility as foreign governments review their sour moods.

New news from the US CBO warns of crushing US debt, estimated to reach 156% of GDP by 2055.  The problem with that is, President Trump is the only one aiming to do something about it, and he is under intense seige to return to Biden-era policies.

It’s obvious, the debt-plagued US consumer, funded via deficit spending, simply can’t continue financing the world. In protecting the US, Trump has infuriated its trade partners who have never expressed gratitude for the long windfall they’ve received with their trade surpluses. This all factors into Trump’s own resolve to fix the problem. He calls it a transition, but it’s more like an overhaul of the world economy.

What investors want to know, is will the stock markets crash, and should they be bailing out in 1929 fashion. Are we a few short news stories away from that outcome? It all might sit with foreign leaders escalating with more tarifffs on the US, which China has already done.

If you’re looking for numbers, the latest global ones are frightening, and the US treasury has no answers other than to keep rates high so they can sell more debt (J Powell). Scott Bessent, Trump’s new treasury secretary believes the downturn isn’t a big issue and that they’re going to hold the course.  The US situation isn’t as dour as the rest of the world, so Bessent might be correct.

With high interest rates and inflation, how can America’s small businesses thrive?  The economy and stock market is geared to huge corporations and their needs. Will the chasm between them expand to swallow up the stock market? The dimensions and influences on the market are hard to grasp, which is why economists are not eager to offer forecasts, which could imperil investors. Honesty requires we take a good look at the risks ahead in 2025.

Bubbling Up Heading to Euphoria?

Tesla, Apple, and Nvidia shares are rising in value despite having high price-to-earnings ratios. Palantir holds the distinction of having one of the worst P/E rations, yet its share price is jumping. Is this the irrational exuberance that precedes a market crash?

President Trump’s pro-US business initiative will cause reflation — one significant threat added to many.  The sudden and dramatic tariffs he’s implementing create volatility in the markets. Manufacturing jobs dropped last month.  US manufacturing isn’t ready to assume the roles of China, Mexico and Canada.

Trade wars, supply chain disruptions, inflation, housing shortages, reduced government spending, costly wars, national economic failures, AI, and rising trade barriers are more dangerous than Americans believe. Even the US can’t be an economic island. The transition back to a productive debt-reduced country is a big risk. DOGE cutbacks of up to $1 Trillion will create some economic ripples.

US Dollar Won’t Recede for Years

The US dollar is rising back into record territory as a safe haven for investors  — and because the US is a better place to invest in stocks and companies. From cryptocurrency to AI to energy, the groundwork is being built for an outstanding economy for the next 5 years. Still, as Americans launch into their new sprint, there is debris on the track. Debt payment problems, inflation, rising wages, labor and material shortages, and supply chain issues are real. Inflation is a real threat. If the FED raises rates this spring, it’s one hurdle the exuberant Trump boom might not get over.

The prospect of a severe US stock market correction or crash became more real yesterday as Donald Trump announced his plan to apply 25% tariffs to Canada, Mexico and 10% more to China.

Republicans are putting their faith in lower oil prices which would reduce inflation. A trade battle with Canada will nullify any such prospect. The reality might be that economic growth will worsen inflation thus keep rates high. Tariffs will exacerbate the inflation and slow the economy.

The biggest indicator of whether there will be a stock market crash happened a week ago with the DeepSeek AI scare.  The US AI technology sector was almost leveled by one small company with an efficient product. That product is being disseminated and adopted, so there’s no getting rid of it now.

Trump himself may not comprehend the dangers and risks, and thus not respond appropriately. His single-minded focus on instant trade balance leaves the US vulnerable to unexpected shocks. As a result, the possibility of a Black Swan event is real.

Most investors and investment experts and economists believe that despite some nasty corrections and volatility, the US will get its stride and the growth and profits will be real. Unless China can throw a wrench into the machine.

The stock prices on the major indexes (with very high P/E ratios) suggests many large Mag 7 corporations can’t keep growing like they have. Experts have been forecasting a broadening out trend or shift to small caps. Still with interest rates and consumers feeling a lot of pain, the support for all this growth is a little sketchy. Even with good earnings reports, investors punished both Google and Palantir this week. It’s the forward guidance that suggests trouble ahead.

For investors, would it become a total selloff or will the Dow Jones, S&P, NASDAQ and Russell 2000 see different grades of losses? They tend to fall in suit on bad economic news. Will they crash all week, or bounce back after the blood-letting?

Andrew Slimmon of Morgan Stanley believes a 10% to 15% correction is coming this year. 

The wild card of Alberta oil is being decided this weekend, and it’s certain either tariffs or big cut back in high quality crude which the US doesn’t have will hit Trump hard. The only way for Canada to balance trade with the US, would be to ship all of its oil and gas to the world and not into the US.

When Will a Crash Happen?

Given much of it is about Donald Trump’s unpredictable and poorly articulated political decisions, even the best stock market experts can’t get a handle. Even formerly reliable Tom Lee of Fundstrat is batting poorly of late. Earnings, technicals, P/E ratios, cash flow, balance sheets don’t seem to matter. The market is driven by future expectations. If they lose that view of perfection, a selloff will happen.

Retail investors are all in on risky tech stocks such as Nvidia and AMD, who feast off the clunky US AI infrastructure scheme.  DeepSeek’s open source code and low price could injury the expensive, over-invested US AI sector.  Sam Altman of OpenAI was almost glowing in his admiration for the AI startup, and Microsoft wants to integrate DeepSeek into its AI copilot assistant.

US AI is vulnerable to more efficient and less costly innovations. If inflation, interest rates, and the price of energy don’t fall, it spells bad tidings for the stock market ahead.  Many investors welcome a stock market correction as a buy the dip opportunity. So not everyone fears a crash. What are the best stocks to buy right now?

There’s More Headwinds Too!

You and many other investors are concerned about how the US will manage this transition to American prosperity and the deficit-free government. The FED is staying put with rates, paralyzed to move either way during this harrowing period of trade wars.

Previous forecasts for the stock market were rosy, but all the predictions are likely facing major revisions as this one single event from Trump threatens to topple the American recovery apple cart.  What’s unfortunate, is that Trump could have engineered an American revival by using more gradual tariffs and bilateral negotiations to get the “deal” he says he loves.  And turning trade into Vanity Fair, puts everything on shaky ground.

Ed Yardeni Did Love the Outlook, but Now!

Ed Yardeni spoke of the risk in a Fox Business interview recently. He drew a corollary to the roaring twenties of the 20th century which ended very badly. The stock market has soared to peaks and the forecasts for extreme continued growth are a little sketchy. Ed notes the danger of this “melt up” as it’s being referred to, however he doesn’t see any signs of recession. Yet he believes there is room for more growth.  And just this week, he still concedes that no one knows for sure.

Let’s enjoy this conversation with CNBC’s Scott Wapner and Ed Yardeni.  Keep in mind, Yardeni knew the tariffs were coming.

As I’ve repeated much for the last decade, politics runs markets and business health.  The removal of Biden/Harris and the woke ideology, ending regulation and high taxes is wonderful, but prosperity in theory isn’t real. The tariffs do threaten to topple the Republicans and stop Trump from implementing and the bills he needs to get past the house and senate.

The Transition Creates and Opportunity for a US Stock Market Crash

The danger has to be in the transition to the Pro-American agenda and attempts to sabotage it.  The FED intends to stand in the way of the rapid progress that President Trump wants and Trump’s allies in the Senate will likely turn on him.  37 states rely on Canada for their inputs, and losing them puts these states in crisis. Their desperation to find new suppliers and customers to replace Canadians is a challenge. The situation with Mexico is the same.

Let’s take an academic review of the realm of factors involved in stock market crashes.

1. Geopolitical Tensions and Protectionism

Impact on Stock Prices:

• Trade Barriers and Tariffs:
  • Increase costs for multinational corporations reliant on global supply chains.
  • Squeeze profit margins as businesses struggle to absorb or pass on higher costs.
  • Lead to retaliatory measures by trading partners, reducing market access and revenue opportunities.
  • Sectoral Impact: Export-heavy industries like manufacturing, tech, and agriculture face declines; global equities in emerging markets (dependent on U.S. or EU trade) also slump.
• Investor Sentiment:
  • Heightened uncertainty discourages investment, pushing stock prices down.
  • Safe-haven assets like gold or bonds attract capital, reducing liquidity for equities.

2. Rising Interest Rates

Impact on Stock Prices:

• Increased Borrowing Costs:
  • Higher interest rates make it more expensive for companies to finance operations, expansions, or debt refinancing, reducing earnings.
  • Leveraged companies, particularly in industries like real estate, utilities, or telecoms, face sharp declines.
• Shift in Asset Allocation:
  • Bonds become more attractive as yields rise, diverting capital away from riskier equities.
• Impact on Valuations:
  • Discounted cash flow models use interest rates as a key input. Rising rates reduce the present value of future earnings, leading to lower valuations, particularly in growth sectors like technology.
• Economic Deceleration:
  • Consumer spending and corporate investment decline, hurting sectors reliant on discretionary spending (e.g., retail, automotive).

3. Debt Overhang

Impact on Stock Prices:

• Corporate Debt:
  • Highly leveraged firms may face solvency issues in a high-interest-rate or low-revenue environment.
  • Default risks can create fear contagion across equity markets, especially if concentrated in key sectors like tech or energy.
• Government Debt:
  • If U.S. debt levels cause fears of fiscal irresponsibility, Treasury yields might spike, increasing the cost of borrowing for corporations and consumers.
  • Rising concerns about future tax hikes to manage debt could dampen business confidence and investments.
• Financial Sector Exposure:
  • Banks and financial institutions holding risky debt may see their stock prices tumble, triggering sector-wide selloffs.

4. Economic Disparities and Consumer Spending

Impact on Stock Prices:

• Weakened Consumer Spending:
  • A dip in consumer confidence or rising unemployment directly reduces revenues for consumer-centric companies (retail, hospitality, travel, etc.).
  • Discretionary sectors, including luxury goods and high-margin products, experience the sharpest declines.
• Credit Markets:
  • As consumer credit tightens (due to rising interest rates or defaults), spending on big-ticket items like homes, cars, and electronics declines. Rising rates or higher for longer puts intense pressure on the real estate market.
  • Real estate and automotive sectors see stock declines, spilling over into materials and industrials.
• Market Breadth:
  • Reduced consumer spending erodes the broad economic base that supports long-term growth, hurting small and mid-cap stocks more acutely.

5. Asset Bubbles (Stock Market Overvaluation)

Impact on Stock Prices:

• Valuation Adjustments:
  • Overvalued markets are more prone to corrections as even minor disappointments in earnings or macroeconomic data can trigger selloffs.
  • Sectors with inflated price-to-earnings (P/E) ratios, like tech or biotech, experience sharper declines as investors rotate into undervalued or defensive stocks.
• Momentum Reversals:
  • Momentum-driven trades unwind rapidly, causing sharp, cascading price declines, especially for high-growth or speculative stocks.
• Liquidity Concerns:
  • Overvaluation often coincides with high leverage and low liquidity. In a downturn, margin calls force investors to sell, exacerbating the selloff.

Are There Any Substantial Threats Though?

Notable threats would be wars, trade wars, and government debt/revenue issues. President Trump is ready to cut government funding severely to eliminate waster. With Elon Musk’s DOGE in operation, the fears are excessive cuts in government jobs and reduced tax revenues could leave the US government in peril.  However, a sizeable reduction in government jobs could help reduce inflation. First of all, inflation was largely attributed to over-spending by the government so eliminating it should help considerably.

Yet, any time drastic, sudden changes in the market happen, it can send ripples through the equities market, causing nervous investors to panic.

Consumer panic is generally not considered a crash factor, yet with Americans in a greedy mood expectant of great prosperity, pullbacks and profit taking might get pushed into overdrive, especially if the Democrate media see it as an opportunity to crash Trump.

Change is a variable (market rotation, fed rate pivot, disinverted curve, ai technology, election) that brings doubts and instability.

Investors are positive but still holding their breath. Warren Buffet is very cash heavy himself, suggesting he’s waiting for something, likely the election decision.  And it looks like a Trump win would be the sigh of relief that would allow US investment to go full throttle. And that would bring inflation back.  Is the Presidency and FED rate the factors everyone believes they are? Can Harris, a former attorney manage the world’s largest capitalist economy, mired in massive debt?

Investor Confidence Soaring

Investors’ confidence is one indicator to consider. Consumers are expecting a long period of prosperity ahead with booming times for small business, the travel market and the housing market, and are only getting comfortable with the idea. And as the chart shows, their mood is positive but not nearly as strong as it was before the Covid pandemic. There’s room for prolonged growth similar to the 2012 to 2019 period.

The of Economic Repression in the US?

The chart below shows the persistent low GDP performance of the US. When compared to China’s it seems anemic. With the new Trump features, the economy has to produce much larger GDP. Trump’s requirement for foreign countries including Europe to buy American to achieve balance, that alone is a massive boost in GDP.

President Trump seems determined and serious to bring trade back to fair territory and by wiping out a $1,000,000,000 yearly deficit, it’s a massive infusion of lost wealth that’s being captured and spent in the US.

When is Critical Mass?

The key insight here is that the markets haven’t hit a critical mass point that sparks a collapse.  The critical mass event would be a roaring US economy where euphoric buying occurs and where inflation begins to soar.

And the matter of excessive American prosperity, spending, and lack of caution could easily result in another 1920’s style crash.

Are there any corollaries between now and 1929? With certain political outcomes, the stage might be set for a roaring twenties scenario, something Ed Yardeni has spoken of.

We need to ask why, if consumer spending drives the economy, why it would continue this fall season?  Why is consumer spending so hot?  And what happens when it fizzles? Government and citizen debtloads are very high.   Based on polling data, Americans might vote for the status quo, but the status quo stands on a mountain of debt, China trade, and persistent high interest rates which may not be reduced. They could vote to protect their social entitlements.

 

The point to make today is that a negative US economic forecast would expose the weakness of the entire investment marketplace.

A crash in the US stock market would likely require:

• negative GDP, earnings, and global economic reports
• fast consumer spending drop, unemployment rise
• housing market downturn — price collapse
• a trade war with China (anti-dumping action already happening)
• persistent high interest rates which allow the Democrat government to attract buyers for its bonds/treasuries, and cover a tax shortfall to keep the government functional
• debt ceiling impasse and Republican resistance
• government spending cuts because the money is running out
• tax threats against the wealthy
• rising oil prices
• a Democrat candidate winning the Presidential election

Right now, it doesn’t look like the negatives are gaining any traction. The biggest threat might actually be high oil prices, yet productive capacity is high and it would take a couple of years before demand outstrips supply. Of course, OPEC could squeeze supply and push prices up at any time.  They likely will not support <$60 per barrel so we’re near the best we can get.  In fact, right now at $70 a barrel and below $3 for gasoline, it looks positive and stable.

See all the factors to watch for.

In this article:

It’s all Political
What Supports the Economy Currently in 2024?
Investor Bets are on Trump Win
Steady High Interest Rates Induce Recessions
Stock Market Crash Timeline
US Government Debt Ceiling Woes
Why the Optimism from US Investors?
The Economy is Okay, so How Could this Bubble Burst?
Is Euphoric Thinking the Status Quo Now?
Will the Housing Market Collapse Too?
The Blind following the Blind
Key Market Crash Factors to Watch

It’s All Political

It’s not market valuations that matter. It’s political decisions out of the White House that raise the risks.  And those risks are accumulating like a pressure cooker.

Is the FED rate a political decision?  Yes, because J Powell and company respond to White House actions.  They’re keeping the rate up due to inflation from overspending (which Powell has complained about).  And the rate might stay high because the Democrat government needs to attract buyers of government bonds and treasuries to stay afloat. They can’t sell their bonds at 2% or 3%, as they’re junk bonds compared to top, improving returns on equities.

They can eliminate the taxes for those buying bonds and treasuries which might help for a short-term boost, but inevitably, junk bonds at 2% returns simply aren’t investible. With tax revenues flat and at risk, they’re barely able to pay for the interest on the national debt. That leaves little for running the country, hence the need to borrow and print trillions.  The pressure cooker gets hotter.

The question is, when does the house of cards fail?  The reason we haven’t seen the collapse is entirely due to stimulus spending. And when will that tap be turned off?

Donald Trump losing the election would be the major catalyst for a market collapse. The stock market, including small cap investors have already factored in a Trump win (the Trump trade). A Trump/Republican win would bring lower interest rates, lower taxes and deregulation — all very good support for American business, and even the International Megacaps would do alright too. Small business would boom. Conversely, a Democrat win would destroy the expectations for 2025 and for the next 5 years.

What Supports the Economy Currently in 2024?

The economy itself is protected by continued stimulus money pouring in and bolstered by consumer spending and strong employment. There remains a sizable pot of money in money markets that can fund a big recovery.  But it hasn’t transferred over to equities as yet. Institutional and retail investors are wary.

Yet, as each month passes, the interest on the national debt and low tax revenues are putting the squeeze on the free-spending Democrats.  At some point, the deficit spending has to stop and with a Republican win in the Senate and House elections, they would be able to block government over spending. This is almost a certainty if Trump loses the election.

A check of each US state also raises concerns about a collapse. California and New York remain in severe distress often supported by FED handouts. A recession would be devastating to many vulnerable US states.

Investor Bets are on a Trump Win

The market expects and anticipates a Trump win. And that is far from a certainty now. Investors will remain cautious until Nov 8th where they can make their investment decision for 2025 and the next 5 years.

Predicting the next stock market crash is never easy. So many economic, political, and international trade factors and more, are difficult to predict.

We might think any mention of a stock market crash is pessimistic.  Yet awareness of the factors that precede a crash is important for pensioners, over-leveraged investors, frightened fund managers, options traders, and others who might not be able to deal with a market failure.

With interest rates rising, housing sales cooling, China production shutdowns, Fed balance sheet tightening, consumer sentiment dropping, price-earnings ratios too high, wages and jobs too positive, and the dollar racing upward in value, there are plenty of reasons to consider the possibility of a major slide.

Steady High Interest Rates Often Induce Recessions

Rising interest rates, or too high relative to the economy, always preceded a recession and most housing market crashes. Most forecasts for 2025 and 2026 are subdued, as economists might see high rates, debt, trade protectionism, and more retarding economic output and employment.

Andrew Slimmon of Morgan Stanley believes a 10% to 15% correction is coming this year.  He says to be ready for this drop, ready to buy high beta, low risk value stocks. Goldman Sachs has predicted a 35% chance of a recession.

Even Jeremy Grantham is being interviewed now, and he’s been calling for a crash for many, many years. The boy who cried wolf is still howling.

With further Fed stimulus uncertain, the US economy is coasting on fumes and might struggle to reach the recovery without major correction. The Dow, S&P and NASDAQ are well down again today after a bad week. There is real concern as for a recession. No one really considered war and trade embargoes to enter the stock market forecast picture.

Stock Market Crash Timeline

If you’re looking for stock market historical timeline events, history charts won’t help.  The 1929, 1987, 2000, 2007 crashes were unique, with unique factors that combined in a fateful sequence. The economy’s strength is cited as invulnerable. However, as pointed out in this post, the real catalysts are being hidden, covered up and spent over to get them out of sight.

US Government — Debt Ceiling Woes

As you read the full investigation of a stock market plunge potential threat to you and your investments, consider that the one thing that may break the economy at some point – US government debt. My first post on the debt was when it was $20 Trillion. Now it’s fast approaching twice that level.  While we can ignore our debts, inevitably, we reach the allowable limit. In this case, the interest payments are nearing $1 Trillion, which is more than the US military budget.  There are estimates of near $2 Trillion in 2025.

Each debt ceiling limit hit has been responded via continuous ceiling hikes requiring legislation and bipartisan support. When the debt ceiling talks resume

The New York Times does cover these grave dangers, and actually devotes a whole section to the US national debt.

What Leads to a Stock Market Crash?

• P/E ratios are double the S&P historic average
• lower stimulus spending as small business still hasn’t relaunched
• interest rate rises too fast causing shockwaves
• extreme volatility shakes conservative investors’ confidence
• supply chain stoppages kill trade and jobs
• markets hit their peak and money leaves the US markets for better returns elsewhere
• big tax hikes on corporations and billionaires hits harder than anyone realizes
• big state taxes in California, Illinois, California and several other states will see wealthy people leave
• wealth Americans avoid US taxes any way they can – invest in Mexico, China, Indonesia, Vietnam, Brazil
• trade deficit pushes toward $1 trillion pushing government into revenue crisis
• unemployment moves back up given China is too competitive and controlling of markets
• democrats kill fracking which would create job losses and it raises oil and fuel prices
• the Fed is forced to push interest rates up to support government bonds and treasury sales
• rising interest rates reduce profit and increase bankruptcies and foreclosures
• pension funds fail as stimulus for them ends this year

The Dow Jones forecast, S&P forecast, and NASDAQ forecasts are positive for the last 3 months (see chart below) but the recent selloffs are a concern.

13 Reasons Why the Optimism from US Investors?

1. economic data is positive with spending, GDP, manufacturing output, and lower inventories
2. inflation is dropping and has been for 15 months
3. possibility of a Trump win with lower taxes, lower social costs, lower crime, deregulation, lower interest rates, reduced war threat, and pro US-business initiatives
4. Europe is spending stimulus funds
5. China is stimulating their economy after seeing exports to the US decline
6. increased tariffs against China protects US businesses
7. US domination of AI technology protected from China predation
8. small businesses see lower inflation and borrowing costs
9. investment in treasury bonds (rising yields) shows a taste for risk
10. travel market remains strong
11. consumer confidence still strong reflecting optimism
12. real estate market at rock bottom with price declines and lower mortgage rates inevitable to stimulate sales beginning in 2025
13. stock market investors are optimistic

Since we can’t rely on experts to predict up against today’s unique circumstances, risks, and changing trade relations, we should try to understand it ourselves and create our own 1 to 5 year forecasts.

The Economy is Okay: How Could this Bubble Burst?

It’s all about investor and consumer confidence. And with stocks bubbled up, there’s bound to be significant fears of massive losses. Given so many Americans live on the edge financially, they would pull back spending and selloff fast. We’ve seen several of the selloff events which shows everyone has their finger on the trigger.

It’s going to be a political event that will start the fast selloff. It’s hard to anticipate what that will be. A Kamala Harris win on Nov 5th, 14 days from now would do it. Investors may feel the bubbled up prices are simply not worth it.  With a lack of confidence in the Democrat run economy, investors could flee the stock market. That in turn could affect consumer spending, and lead to years of low performance.

But is a 10% correction really a stock market crash? The real harm might not be the drop but rather

Is Euphoric Thinking just the Status Quo Now?

This market’s phenomenal, euphoria-driven rise in 2024 surprises analysts and investors who wonder why? Valuations are sky high and in some cases laughable.

Will the Housing Market Collapse Too?

Home prices keep rising to new record highs even as sales decline. Sellers are lockedin and buyers can’t afford houses, with average qualifying incomes and mortgage payments far exceeding buyer’s capabilities.

Millions of mortgage holders will have to refinance at high rates, meaning they will be house poor or forced to sell.

Experts predict a crash will not happen. But that’s based on the theory that with buyer demand at ultrahigh levels and supply so inadequate, and with new home construction falling, and lending criteria strict, that home prices cannot fall. But outside that theory is the reality that people simply cannot afford to buy or rent today.

The actual crash trigger would involve millions of homeowners who can’t afford their homes or want to dump them before prices fall. If the political/economic outlook should dim, how strong would this dumping factor become?

The Blind following the Blind

Investors often follow trends, blindly tailgating each other on a high-speed digital highway. If anything happens, there’s going to be a chain reaction crash. The surge of self-directed investors too is one factor a few markets experts have noted.

While many follow Warren Buffet and listen to AI stock forecasting technicals, they don’t really know what they’re doing. They’re in the dark about complex market forces and suddenly find themselves victims in a sentiment-driven panic.

Key Factors to look for:

• stock prices at record levels
• government passes complicated new tax bills that confuse and make investors uncertain
• geopolitical events disturb international trade relationships and flow of goods/money
• inflation and wages rise faster
• housing prices peak
• consumer product surpluses
• natural end of a long business cycle
• stock price to earnings ration too high (Shiller Pace is above 30)
• misery index rises (unemployment rate + inflation rate)
• the NAAIM index is too high (professional investors optimism)
• growing market fear that may induce panic (investment advisors, market experts, bloggers)
• assets have peaked in profit performance and wealthy begin to unload
• too much consumer debt combined with risky investments (housing) and rising unemployment
• corporate-Equities-to-GDP Ratio
• accidental or emotional timing of government fiscal events (China preventing funds exodus)
• key corporate failures in financial sector (bank, mortgage company, investment firm)

When do you think this current bull run in the markets will end? Please do comment below on how you see the 2025 stock market playing out.

Disclaimer:  The statements and information presented in this post is not intended as professional investment advice. It is solely an exploration of stock investing and the risks, perils, and behavior of stock markets and the economy. No one should rely on a single source of information or a single stock market expert or investing professional’s advice.  That is high risk. The overall message of this post might be to diversify stock, real estate, and cash/gold holdings as a hedge against stock market crashes.  Investors should look into hedging strategies but be aware that even hedging may provide limited protection from a crash.