Well-known "prophet": The rise of cryptocurrency strengthens consumers' balance sheets

History may be about to repeat itself, as well-known "prophet" Felix Zulauf, head of Swiss Zulauf Consulting, expounds on his typically stern Swiss perspective on global markets, which is always a useful supplement to the inevitable optimistic speculation of most Wall Street prophets. For now, Zulauf believes that the market will continue to rise, and he acknowledges the well-publicized technical negatives in the stock market - for example, extremely optimistic sentiment shows that investors are fully invested and there are few new buyers. At the same time, market winners continue to be concentrated in large technology companies, and the deterioration of market breadth is also a warning sign. But he believes that positive liquidity trends should continue to push prices higher. Felix Zulauf also said that exchange rate fluctuations will have a negative impact on the stock market and, in turn, the US economy. The traditional view is that the stock market is driven by the economy, but he believes that this relationship has been reversed. The rise of the stock market and cryptocurrencies has strengthened consumers' balance sheets, allowing them to save less and spend more. At the same time, the US labor market is in short supply, pushing up wages - and strong asset prices enable more Americans to quit their jobs and enjoy early retirement. But the stock market reversal will have a negative impact. "I spend a lot of time in Florida, and I know a lot of people who are wealthy and have strong balance sheets," Zulauf said. "I can tell you that if the market goes down 20%, they're going to pull back and cut spending. I've seen it in the past and I'll see it in the future." At the same time, poorer people with relatively few assets and tighter balance sheets account for a much smaller share of spending, he added.