That’s one of the issues addressed by Swissquote senior analyst Ipek Ozkardeskaya in her daily note today.<\/p>\n
“US net margin debt exceeded 1.25% of US market capitalisation at the end of April, the highest level on record going back to 1997,” she wrote.<\/p>\n
“The last time US net margin debt was this high was just before the dot-com bubble burst.<\/p>\n
“So we keep returning to the same question: Is this a bubble?<\/p>\n
“As an economist, I will repeat that it isn’t a bubble until it bursts. But a few indicators are flashing red.<\/p>\n
“Market breadth is one of them. The equal-weighted versions of the major tech-heavy indices are lagging behind their cap-weighted counterparts, and they have good reasons to do so, including rising energy prices, higher inflation expectations, rising global yields and a deteriorating economic outlook. The gap between the Kospi and its equal-weighted version is especially worth noting.<\/p>\n
“In the US, the Nasdaq’s PE [price-to-earnings] ratio has climbed to historically uncomfortable levels. The CAPE ratio is approaching 40 \u2014 the last time that happened was during the dot-com bubble.<\/p>\n
“And the Buffett Indicator \u2014 which measures total stock market value as a share of GDP \u2014 has surged above 230%, the highest level on record by a wide margin. For perspective, it peaked around 130% during the dot-com bubble.<\/p>\n
“These metrics do not answer the question of whether this is a bubble, nor do they necessarily mean a crash is imminent. But they do suggest that investors are paying significantly more for each dollar of economic output than at any point in modern market history.”<\/p>\n
#ICYMI Alan Kohler’s That’s Business interview this week is with AI giant Anthropic’s chief economist Peter McCrory.<\/p>\n","protected":false},"excerpt":{"rendered":"That’s one of the issues addressed by Swissquote senior analyst Ipek Ozkardeskaya in her daily note today. “US…\n","protected":false},"author":2,"featured_media":701810,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[2001,64,29217,63,166,2009,99,174,20024,5304,2003,2005,164,186,1605,160,6461,2010,1603,171,78777,2007,2006,5463,20611,5464,41884,2004,1996,1491],"class_list":["post-701809","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-asx","tag-au","tag-aud","tag-australia","tag-australian-dollar","tag-bitcoin","tag-business","tag-business-news","tag-commodities","tag-currency","tag-dollar","tag-dow-jones","tag-economy","tag-finance","tag-finance-news","tag-live-blog","tag-live-news","tag-live-update","tag-market-news","tag-markets","tag-markets-live","tag-nasdaq","tag-nyse","tag-sp-500","tag-sharemarket","tag-shares","tag-stockmarket","tag-stocks","tag-tech","tag-wall-street"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/701809","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=701809"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/701809\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/701810"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=701809"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=701809"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=701809"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}