Why overpriced stock markets are headed for a major correctionLow bond yields caused by central banks’ ultra-loose monetary policies leave income-starved investors with little choice but to remain invested in equities
The combination of ever-loftier valuations and rising volatility associated with the withdrawal of stimulus will eventually prove too much for stock markets
by Nicholas Spiro
EPFR published data last weekend that showed global equity funds attracted a whopping US$580 billion in inflows in the first half of this year.
If the pace of the inflows keeps up in the second half of this year, global equity funds will attract more inflows in 2021 than in the last 20 years combined.
TINA – “there is no alternative”
US Treasury yield stands at just 1.37 per cent, lower than in February. Japan’s 10-year yield is stuck near zero, while its German equivalent is trading in negative territory.
Although nominal yields are higher in the US, real yields – which strip out the effects of inflation – are deeply negative.
Allocations to global stocks are at their highest level since the beginning of this year and close to record highs. Allocations to global bonds, meanwhile, stand at a three-year low.
Source: SCMP
https://www.scmp.com/comment/opinion/ar ... correction
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