The sharp rise of US stocks led to a heated debate on Wall Street: Xiaomo Warns foam Risk; Goldman Sachs insists that the rise is reasonable
爱时间GD
发表于 2024-3-5 12:16:25
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Is the US stock market forming a foam? It depends on who you ask.
Since the beginning of this year, the S&P 500 index has hit a new closing high 15 times and has risen for four consecutive months. The "Big Seven" companies in the US stock market, especially leading stocks such as Nvidia, Meta, and Microsoft, have driven up major stock indices.
In this context, there have been increasing doubts and concerns on Wall Street, and Marko Kolanovic, Chief Market Strategist at JPMorgan Chase, is one of them.
However, at the same time, analysts such as David Kostin, Goldman Sachs' chief US equity strategist, did not acknowledge the existence of foam. He believes that it is reasonable for the market to experience a sense of adventure. Although large technology companies have high valuations, this high valuation is supported by fundamentals.
JPMorgan Chase: The foam is gradually expanding
In Kolanovich's view, the sharp rebound of the U.S. stock market and the rapid breakthrough of Bitcoin over the $60000 mark are both signs that the foam is gradually blowing up. He believes that these developments indicate that foam are accumulating in the market - foam usually occur when asset prices rise at an unsustainable rate.
As Kolanovich joins the warning ranks on Wall Street, the voices of concern on Wall Street are becoming increasingly undeniable. This can not help recalling the Internet boom at the end of the 1990s, or the post epidemic period of the US stock market craze in 2021.
Driven by the significant rise of technology giants in the US stock market, the S&P 500 index continues to reach new highs. But in the eyes of critics such as Kolanovic, this upward trend is unsustainable.
Kolanovich wrote in his report on Monday: "The market is moving forward with 'low volatility and growing foam'."
He believes, "The stock market has risen this year, despite rising bond yields and fading expectations of interest rate cuts. Investors may believe that the increase in yields reflects an acceleration of the economy, but the profit forecast for 2024 is declining, and the market seems too complacent about this cycle."
In Kolanovich's view, the current US stock market environment reflects investor complacency and underestimation of risk.
He also warned that the continued rise of the US stock market may keep monetary policy high for a longer period of time, as premature interest rate cuts could further push up asset prices or trigger another round of inflation.
This time is different from the past
However, at the same time, Goldman Sachs' Costin and other analysts did not recognize the existence of the foam. He believes that it is reasonable for the market to experience a sense of adventure. Although large technology companies have high valuations, this high valuation is supported by fundamentals.
Costin believes that this upsurge is different from the foam period in the past. Different from the previous foam period when the stock price of the US stock fluctuated significantly and the valuation usually exceeded its value, this time, the breadth of "extreme valuation" of the US stock market was much smaller, and compared with the peak in 2021, the number of stocks traded at the super high valuation declined significantly.
In his report last Friday, he wrote that contrary to the "growth at all costs" mentality of 2021, "investors mostly pay overvalues for the largest growth stocks in the index." "We believe that the valuations of the 'Big Seven' companies are currently supported by their fundamentals."
As the fourth financial reporting season approaches its end, the financial performance of various companies in the US stock market also confirms the rationality of stock price increases. Data shows that as of now, the released financial reports show that the earnings per share of US stock companies increased by 59% year-on-year in the fourth quarter of last year, significantly better than the expected 47%.
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声明:该文观点仅代表作者本人,本文不代表CandyLake.com立场,且不构成建议,请谨慎对待。
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