Source: Bloomberg
Author: Alexandra Semenova
Is the US stock market bubble formed?The answer depends on who you ask.
For Marko Kolanovic, the chief market strategist of JP Morgan Chase, the sharp rise in the US stock market and the rapid breakthrough of Bitcoin exceeded the $ 60,000 mark. The answer is yes.He believes that these rises show that the foam in the market is accumulating -this usually occurs before the bubble period of asset prices at the foam of unsustainable speed.
Warning from Wall Street is heating rapidly, and Kolanovic also joined this ranks.These warnings reminiscent of the Internet bubbles in the late 1990s and the enthusiasm after the epidemic in 2021. At that time, the stock price rose rapidly and then plummeted.
At the same time, some people think that the emotional emotions are reasonable, including the David Kostin of Goldman Sachs Group, which believes that the high valuation of large technology companies has fundamental support.
As the S & P 500 Index has promoted a new high in the U.S. technology giants, critics have been unsuccessful, and optimists are inspiring and believe that there is more room for rise.
Kolanovic is a key figure in the previous camp.He wrote in a report sent to customers on Monday that the market is advancing forward, "low volatility and foaming are formed."
"Even if bond yields rose and interest rate cuts are expected to cool down, the stock market has still increased this year," he said. "Investors may think that the increase in yields reflects the economic acceleration in 2024.The cycle seems to be too complacent. "
In contrast, Kostin of Goldman Sachs said that unlike other periods in history, the stock price suddenly changed at that time, usually exceeding its value.Different from the previous situation, the width of the "extreme valuation" is much more limited, and the number of stocks with a valuation multiple of extreme levels is far below the peak of 2021.
The "seven giants" of US stocks, especially Nvidia, Meta Platforms Inc. and Microsoft. This year, it leads the major stock indexes.The S & P 500 Index has set 15 closing records in 2024, rising for four consecutive months.
So far, financial performance has proved that its rise is reasonable.According to data from Bloomberg Industry Research, the total income per share in the fourth quarter of these companies increased by 59%year -on -year and expected to be 47%.
But from Kolanovic's view, this environment is puzzling, reflecting the self -confidence of investors and underestimation of risks.
The continuous rise in the stock market "may keep the monetary policy maintain a higher level for a longer period of time, because premature interest rate cuts may further push up asset prices or cause inflation to rise again," he said.
