Orlando Sentinel – A panel of top Wall Street analysts gave some advice last week to some of Orlando’s leading finance experts: Prepare your clients for bad news.
A number of potential warning signs have cropped up that could spell trouble ahead for the stock market, if not the economy, said Mary Ann Bartels, director of global equity trading strategy at Merrill Lynch.
“You never know the catalyst to bring it down,” Bartels said of the market and its three-year bull run. But she added that she and her colleagues in her division have recently moved from bullish to “laying out some caution” based partly on signs such as a flat yield curve and hedge-fund equity trading.
Bartels was one of five panelists who spoke Wednesday to the Chartered Financial Analysts Society of Orlando, which consists of more than 90 top finance experts from academia and private industry, such as SunTrust Banks and Marriott Vacation Club International.
Hedge funds — those large, growing and mostly unregulated pools of capital that now sometimes account for up to 50 percent of daily stock trading volume — have loaded up on equities and are poorly diversified, Bartels said. That’s a contrarian sign, she said, that a top has been reached and a tumble — perhaps as much as a 20 percent correction — may be in the cards.
