Next stock market crash: 4 reasons equities will plunge lower in May

The US stock market is currently at all-time highs, but one Wall Street expert argues a sudden sell-off may be in the cards for May — one that would be worse than the February 2018 correction.Vincent Deluard, a macro strategist at INTL FCStone, breaks down four pieces of evidence that support his immediate-term bearish view.Follow all of Business Insider's coverage of the 2019 Milken Conference here.Stocks are at record highs, and many experts on Wall Street will tell you conditions look ripe for continued strength.Vincent Deluard is not one of them.In fact, the INTL FCStone macro strategist — who regularly publishes thoughtful research on a wide range of topics — thinks the bottom may drop out of the market this month.That may seem like an aggressive forecast give the tight time frame, but Deluard lays out a compelling four-part argument to support his near-term bearish view. If his overall take had to be summarized into a single theme, it's that the drivers supporting stock strength will soon be impediments.Here are his four arguments:1) SeasonalityThe age-old saying for stock-market pundits is “sell in May, then go away.” While Deluard's argument is far less simplistic, it does call upon historically weak equity performance this time of year.Deluard says that, when viewed in tandem with the other three elements on this list, this is a troubling reality that could send stocks tumbling into a correction.“To the extent that stock market seasonality does exist, it will stop supporting stock prices at the end of the month,” he said in a recent report. “Since 1973, stocks have tended to flat line from mid-May to the end of November.”2) The melt-up in stocks is already completeA great deal of recent stock-market punditry has focused on a so-called melt-up. While such an occurrence does push equities higher, it's usually viewed as a late-cycle indicator — a last-gasp effort for traders to ride the momentum wave higher.For those who think the melt-up can continue indefinitely, Deluard points to the S&P 500's four-month Sharpe ratio. The measure has been a historically reliable way to assess risk-adjusted excess return.As you can see in the chart below, the only time the metric has been higher was in late 2017 and early 2018 — the period immediately preceding a vicious stock-market correction.“Needless to say, this did not end well,” Deluard wrote.3) Multiples are “entering the danger zone”Stretched valuations have been a frequent target for stock bears throughout the more than 10-year bull market. And so far, those pessimists have been proven wrong.But that hasn't dissuading Deluard from making a similar argument. He notes that, at 17 times earnings, the S&P 500's multiple is already two points higher than its average since 2009.Once again, the point of comparison is January 2018, ahead of the February meltdown. Deluard highlights the fact that conditions might be even more ripe for a correction this time around because there's less earnings growth expected for US corporations.“January 2018 was the only time stocks got this expensive in this cycle, but earnings were expected to grow by 30% in the next 12 months, versus 12% today,” he said. “Note that even very strong earnings growth did not prevent a 10%+ correction in the first quarter of 2018.”He continued: “The combination of elevated valuations and poorer earnings growth prospects could trigger a larger correction this time. The stock market will be especially vulnerable to a correction as multiples are entering the danger zone.”4) The shorts have vanishedUpon first glance, the lack of shorts in the US equity market may seem like a bullish signal. But it's actually the opposite.A healthy stock market generally has an underlying short component of people simply protecting their downside. Those shorts, in turn, can serve as valuable dry powder when investors get more bullish and want to get long.On the flipside, a low level of short interest — like we're seeing right now — can actually signal that market pessimists have turned bullish. That's exactly the type of overexuberant behavior that portends sell-offs.According to Deluard's findings, short interest on the six largest US equity exchange-traded funds currently sits at 7.4%, one of the lowest readings on record.This rally may be 'the most hated bull market in history,' but the market is filled with 'fully-invested bears,' Deluard said.

美国股市目前处于历史高位，但一位华尔街专家认为5月突然抛售可能会出现这种情况 - 这将比2018年2月的调整更糟糕.Vincent Deluard ，INTL FCStone的一位宏观策略师，打破了支持他的近期看跌观点的四个证据。关注所有Business Insider对2019年米尔肯会议的报道。股票创下历史新高，华尔街的许多专家都会告诉他们你的条件看起来已经成熟，持续的力量.Vincent Deluard不是其中之一。事实上，INTL FCStone宏观策略师 - 经常发表关于广泛主题的深思熟虑的研究 - 认为本月底部可能会退出市场。可能看起来似乎是一个积极的预测给出了紧张的时间框架，但德鲁德提出了一个引人注目的四部分论点来支持他的近期看跌观点。如果他的总体看法必须归纳为一个主题，那就是支持股票力量的驱动因素将很快成为障碍。这是他的四个论点：1）季节性股票市场权威人士的古老说法是“在五月卖出，然后走开。”虽然德鲁阿德的论点远不那么简单，但它确实要求在一年中的这个时候出现历史上较弱的股票表现.Deluard说，当与此列表中的其他三个元素同时观察时，这是一个令人不安的现实，可能导致股市跌跌撞撞。他在最近的一份报告中表示，“就股市季节性确实存在而言，它将在月底停止支持股票价格。” “自1973年以来，股票从5月中旬到11月底趋于平缓。”2）股票的融化已经完成近期股票市场的专家大多关注所谓的融化。虽然这种情况确实推高了股市，但它通常被视为一个后期周期指标 - 交易者最后一次喘息的努力使得动能波更高。对于那些认为融化可以无限期持续的人，Deluard指向标准普尔指数500's四月夏普比率。该指标一直是评估风险调整后超额收益的历史可靠方法。正如您在下面的图表中看到的那样，该指标唯一一次走高的时间是2017年末和2018年初 - 即恶性股市之前的时期“不用说，这并没有结束，”Deluard写道.3）倍数正在“进入危险区域”在超过10年的牛市中，拉伸估值一直是股票熊的常见目标。到目前为止，这些悲观主义者已被证明是错误的。但这并没有阻止德鲁阿德提出类似的论点。他指出，在17倍的收益中，标准普尔500指数的倍数已经比自2009年以来的平均值高出两个点。再次，比较点是2018年1月，在2月份的崩溃之前。 Deluard强调，这次调整的条件可能更加成熟，因为预计美国公司的盈利增长将会减少。“2018年1月是股票在这个周期中变得昂贵的唯一一次，但预计盈利增长30％未来12个月的比例为12％，而今天为12％，”他说。 “请注意，即使非常强劲的盈利增长也无法阻止2018年第一季度出现10％以上的调整。”他继续说道：“估值上升和盈利增长前景较差的结合可能会引发更大的调整。股市将会特别容易受到多重进入危险区域的修正。”4）空头已经消失乍看之下，美国股市缺乏空头看似可能看涨信号。但事实恰恰相反。健康的股票市场通常只有人们的短期组成部分，只是保护他们的下行空间。反过来，这些空头可以作为有价值的干粉，当投资者变得更加看涨并希望做多时。另一方面，短期利率的低水平 - 就像我们现在看到的那样 - 实际上可以表明市场悲观主义者已经转向看涨。这正是过度的类型据Deluard的调查结果显示，六大美国股票交易所交易基金的空头利率目前为7.4％，是有史以来最低的读数之一。这种反弹可能是'最讨厌的牛市中的一个。历史，'但市场充满了'全额投资的熊'，'德鲁阿德说。