Despite all these early signs of trouble, the market marches on with euphoria as if the current bull run — one of the longest in history — can go on forever.
Economy and Finance
Bubble About to Burst?
Last month, Anti-Media reported that some of the biggest institutions on Wall Street have issued warnings to investors that planet-wide financial markets are nearing a downturn. From an August 22 article by Bloomberg:
“HSBC Holdings Plc, Citigroup Inc. and Morgan Stanley see mounting evidence that global markets are in the last stage of their rallies before a downturn in the business cycle.
“Analysts at the Wall Street behemoths cite signals including the breakdown of long-standing relationships between stocks, bonds and commodities as well as investors ignoring valuation fundamentals and data. It all means stock and credit markets are at risk of a painful drop.”
It appears the fear may be spreading. Citing a new financial survey, Mark DeCambre of MarketWatch reported on Friday that a vast majority of Wall Street executives interviewed think the currently record-setting stock market is about ready to decompress:
“More than 80% of chief financial officers surveyed by accounting firm Deloitte said U.S. stock markets are overvalued, marking the highest level since Deloitte began conducting its quarterly poll about eight years ago.
“The findings underline an increasing sense of dread by market participants that stock valuations have become bloated after the S&P 500 index, the Dow Jones Industrial Average and the Nasdaq Composite Index have registered repeated records and remain less than a percentage point from fresh records in recent trade.”
Specifically, DeCambre writes, the Dow has hit 42 records thus far in 2017, Nasdaq has hit 49, and the S&P 500 has ended on record highs 37 times.
MarketWatch’s Ciara Linnane also reported on the new survey on Friday. Linanne spoke with the survey’s lead author and managing director of Deloitte’s CFO program, Greg Dickinson, who said one of the most worrisome risks to the market CFOs cited was tension between the United States and North Korea.
Additionally, Linanne writes, “the failure of the administration of President Donald Trump to advance agenda items, such as tax reform, trade policy and health care reform provided another layer of uncertainty.”
Despite all these early signs of trouble, the market marches on with euphoria as if the current bull run — one of the longest in history — can go on forever. The average American investor does not appear to be heeding these near-apocalyptic warnings.
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