The past few weeks are a reminder of what can happen when valuations are priced for perfection
A sell-off in risk assets to start the year is a reminder of what can happen when valuations are priced for perfection.While some investors view the roiling markets that have opened the year as a symptom of the uncertainty that comes with Donald Trump’s return to the White House, Kevin Khang sees the beginning of a longer-term duel between opposing trends.
On the other hand, the U.S. economy has a structurally unfunded liability in the form of entitlement spending that’s being financed through the issue of new treasuries. And that will become more difficult for large U.S. tech companies that have benefited from light capital investment but are now being forced to spend on data centres and other things in a growing AI arms race.
“The euphoria for equities is being driven by continued belief in the soft landing narrative, bullish projections for artificial intelligence, and optimism over what Donald Trump’s election could mean for the economy,” the report says.While investors could keep bidding stocks up in the near term, Picton Mahoney says the market is increasingly divorced from fundamentals and vulnerable to stubbornly high inflation.
For bond investors, that means the primary source of returns will be clipping coupons rather than price appreciation, he says.
Globe Advisor Appwebview Advisorweeklynewsletter
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Ontario appoints reviewer for Brantford-area Catholic school board after pricey Italy art tripOntario Minister Education Minister Jill Dunlop walks to a news conference at Queen’s Park in Toronto, on Feb. 26, 2024.
Read more »
Investors hope for U.S. stock market trifecta in 2025 after back-to-back boom yearsS&P 500 set for back-to-back years of gains over 20%
Read more »
Stock market today: Wall Street falls to worsen its already dismal weekNEW YORK (AP) — U.S. stocks are tacking more losses onto what was already going to be one of their worst weeks of the year. The S&P 500 fell 0.
Read more »
Stock market today: Wall Street rises to turn a dismal week into just a bad oneNEW YORK (AP) — U.S. stocks rose to turn what would have been one of the market’s worst weeks of the year into just a pretty bad one. The S&P 500 rallied 1.1% Friday to shave its loss for the week down to 2%.
Read more »
S&P/TSX up almost 200 points, U.S. stock markets also rise to end rocky weekTORONTO — Canada's main stock index gained almost 200 points Friday as markets broadly rose to end a rocky trading week, with the main U.S. indexes each gaining more than one per cent. The S&P/TSX composite index closed up 185.
Read more »
Canadian Stock Market Slumps as U.S. Markets ReboundCanada's main stock index fell on Thursday, influenced by losses in industrial and real estate sectors, while U.S. markets recovered after a significant decline.
Read more »