{"id":109552,"date":"2025-10-30T22:05:11","date_gmt":"2025-10-30T22:05:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/109552\/"},"modified":"2025-10-30T22:05:11","modified_gmt":"2025-10-30T22:05:11","slug":"bubble-fears-are-us-sharemarkets-due-for-a-crash-stock-takes","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/109552\/","title":{"rendered":"Bubble fears: Are US sharemarkets due for a crash? \u2013 Stock Takes"},"content":{"rendered":"
But both indices have been blitzed by the technology-heavy Nasdaq, which weighed in with a 24.2% year-to-date gain.<\/p>\n
While Wall Street marches higher, talk of a market bubble is never far away.<\/p>\n
\u201cFor the bubble believers, the tech-heavy Nasdaq 100 is now about 18% above its 200-day moving average \u2013 that is the most since July 2024, when it got to 20% before a 13% correction,” ASB said in a commentary this week.<\/p>\n
The international media has also been flashing warning signs.<\/p>\n
The Financial Times this week said daily share price swings worth hundreds of billions of dollars are becoming commonplace on Wall Street, highlighting the risks to investors.<\/p>\n
\u201cIndividual stocks have gained or lost more than US$100 billion in market value in a single day 119 times so far this year, the highest annual total on record,\u201d the Financial Times said.<\/p>\n
\u201cThe rise of 12-figure stock swings partly reflects the huge size of companies such as Nvidia, Microsoft and Apple, which are all worth more than US$3 trillion each and account for the bulk of the huge moves,\u201d the paper said. <\/p>\n
Earlier this month, JPMorgan Chase CEO Jamie Dimon told CNN he thought there was a higher chance of a meaningful drop in stocks in the next six months to two years than what was being reflected in the market.<\/p>\n
\u201cI am far more worried about that than others,\u201d Dimon said. <\/p>\n
\u201cI would give it a higher probability than I think is probably priced in the market and by others … The level of uncertainty should be higher in most people\u2019s minds than what I would call normal,\u201d he said, adding that \u201cgeopolitics and government debt burdens are contributing to the uncertain outlook\u201d. <\/p>\n
Kiwi view<\/p>\n
Salt Funds managing director Matt Goodson said the commentary from the Fed was a bit more hawkish than expected.<\/p>\n
\u201cOn the question of a bubble, we\u2019d all be rich if we knew whether there was one or not, so all you can really look for are the signs.<\/p>\n
\u201cYes, valuation multiples are highly extended.<\/p>\n
\u201cThe valuation multiples we\u2019ve found tell you nothing about what the market does on a one-year view, but they tell you everything about five- to 10-year forward returns. <\/p>\n
\u201cTaking that longer-term viewpoint, we are quite confident that equities are well overpriced and will deliver relatively poor returns from here globally \u2013 particularly in the US.<\/p>\n
\u201cBut on a one-year view, just the mere fact that valuation multiples are high doesn\u2019t actually mean anything in terms of what may or may not happen.<\/p>\n
\u201cAll we can really do is look for other signs and I think the emergence of large circular deals amongst the big AI players is certainly one sign.<\/p>\n
\u201cAnd we\u2019ve started to see a \u2018junk\u2019 rally \u2013 junk stocks outperforming \u2013 which also tends to happen towards the end of a bull market.<\/p>\n
\u201cWhat pops it? Who knows, and who knows when?<\/p>\n
\u201cAs an investor, I think all you can do is be aware of what\u2019s happening around you and invest with a straight bat.\u201d<\/p>\n
Soft private equity<\/p>\n
While the US sharemarket has gone from strength to strength, the same can\u2019t be said for the listed private equity market.<\/p>\n
And US President Donald Trump\u2019s move in August to allow managers of 401(k) accounts \u2013 America\u2019s equivalent of KiwiSaver \u2013 access to private equity investment does not seem to have had a favourable impact on the listed private equity firms.<\/p>\n
In the year to date, the Global Listed Private Equity PE index has dropped 9%.<\/p>\n
Among the private equity firms, Blue Owl Capital has dropped by 29%, KKR 19.8%, Ares 16% and Blackstone 14%.<\/p>\n
NZME upgrades <\/p>\n
Broker Forsyth Barr says the latest earnings update from NZME \u2013 publisher of the New Zealand Herald \u2013 shows the economy may be about to turn a corner.<\/p>\n
NZME has upgraded FY25 operating earnings before interest, tax, depreciation and amortisation (ebitda) guidance to $59 million\u2013$62m (from $57m\u2013$59m), reflecting execution of previously guided cost-control initiatives and better-than-expected sales performance in what remains a weak advertising market.<\/p>\n
\u201cWe understand improving revenue traction is broad-based across its divisions, adding further evidence that a broader NZ macro recovery is under way,\u201d Forsyth Barr said.<\/p>\n
\u201cWhile advertising remains cyclical and the macro backdrop is uncertain, NZME\u2019s steady execution supports incremental margin recovery and reinforces its dividend-paying profile,\u201d the broker said.<\/p>\n
Restaurant Brands off the menu<\/p>\n
Restaurant Brand\u2019s independent directors have unanimously recommended that shareholders accept an offer from majority owner Finaccess Restauraci\u00f3n for $5.05 per share, despite it being below the independent adviser\u2019s range of $5.24 to $6.20.<\/p>\n
The independent directors said they believed the risks associated with remaining as a shareholder outweigh the offer price.<\/p>\n
The offer represents a premium to recent trading prices \u2013 70.6% to the NZX closing price before the offer and a 79.6% premium to the one-month volume-weighted average price prior to that date.<\/p>\n
Finaccess has received acceptances that will result in it increasing its shareholding to 86.96%. <\/p>\n
The offer remains open until November 25.<\/p>\n
Jamie Gray is an Auckland-based journalist, covering the financial markets, the primary sector and energy. He joined the Herald in 2011.<\/p>\n