Friday, May 7, 2010

Citigroup Predicts A 20% Correction and a Very Volatile Period

Today Citigroup issued a prediction of a near-term correction of up to 20% due to sovereign debt contagion over Greece.

According ot them (in MarketWatch,) the Greek crisis is "graver than other crises" such as Northern Europe in 1992, Southeast Asia and South Korea in 1997

Citi also states that global stock markets have perhaps rallied too far, too fast.
"With global equities having rallied 79.9% in a scant 13 months through April, we feel it would be only natural to go through a correction of around 10% or 20% over two or three months," says a research note.

Global stocks should resume their "upward trajectory in June," but the period in between could be volatile.

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