Observers point to a combination of three drivers - stocks valued too highly, global growth failing to meet expectations and underlying investor behavior since the turn of the year - but curiously no single catalyst.
Many stock markets around the world, including those in both developed and emerging countries, are at or near their highest levels ever thanks to central banks propping up the global economic recovery with their ultra-loose monetary policy.
In the United States the S&P 500 .SPX has almost tripled its level since the post-crash trough in March 2009, while the Nasdaq Composite .IXIC index weighted more towards technology stocks has gained almost 250 percent in that time.
This meant that at the end of March, U.S. stocks were the third most expensive in the world behind Japan and Mexico, analysts at Barclays estimate.
Investors are now no longer selling bonds to buy stocks but are instead buying both stocks and bonds equally. The net effect is stronger bonds, and on a relative basis, weaker stocks.
DYI Comments: NONE
No comments:
Post a Comment