Wall Street is the most expensive since the dot-com bubble. Investors are not feeling the effects of the coronavirus crisis
Wall Street is the most expensive since the era of bursting dot-com technology bubbles. Evidence that they have price tags of local shares. This compared to the expected effects of the coronavirus pandemic on the fire brigade business. According to data from Bloomberg, investors are currently willing to buy shares for 21.5 times their expected profit. Enjoy the optimism that prevailed in the market eighteen years ago.
Wall Street situation
“Currently, a large number of investors do not realize how drastic the drop in profits will be”. Says Cyrrus economist Tomas Pfeiler. The US stock market has been found to be re-corrected. Consequently, share prices are only a few percents. It relates to the current year. The expected decline in yields for this year will be several times higher. For instance, it will browse the portfolio of managers. The market is not yet able to estimate the effects of the pandemic.
Wall Street is experiencing a significant boom over the past month. The S&P 500 stock index is winning by 27% since the last week of March. The willingness of investors to buy shares of overseas firefighters benefited the US Federal Reserve and the government in Washington. Even with the expected erosion of their clients in the weeks of acceptance. “The market gets the impression that if it gets worse, the state or the central bank will be active in the stock market, where it will buy shares,” explains Raiffeisenbank.
The FED and corporate bonds
The US Fed is already buying risky corporate bonds from the stock market. Massive ingredients in interventions leading to stocks becoming safer tools than they have been in the past. This lower level of risk justifies higher stock index values, Pfeiler. The so-called VIX fear index can also be displayed on the screen of the tidy stock market. It is strengthening to almost a third of its level from mid-March.
Fast returning calm love and players are betting on a quick revival of the business after the end of the corona crisis. Firstly, look for the expected profits this year. You can expect to have a chance to get securities in the conclusion that they are overpriced. In the case of the expected profit in 2021, you already have current share prices as acceptable. According to the actual majority, the suggestions from the government and the central bank ended, one way or another, on the stock exchanges. Wall Street is having a difficult situation right now.
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