It doesn’t take a Ph.D. in economics to see that the forces driving the post financial-crisis stock market are fundamentally different that those that reigned for generations before.
But Bank of America Merrill Lynch Chief Investment Strategist Michael Hartnett put this revolution into stark relief in a Friday note to clients, highlighting a series of facts that illustrate just how dependent global stock markets have become on central bank stimulus and ever-growing debt, as well as how the global economy has changed in an age of rising protectionism.1.
2. Emerging market equities are at their lowest level compared with U.S. equities since the dot-com bubble, as measured by the MSCI Emerging Markets Index versus the S&P 500 SPX, -0.73% . 3. Wall Street, or U.S. private sector financial assets, are now 5.5 times the size of total gross domestic product, comparable to the years immediately before the financial crisis. “Between 1950 and 2000, the norm was 2.5 times to 3.5 times,” Hartnett wrote. “Wall Street [is still] too big to fail.”5. We’re living in an age of protectionism not seen in nearly 50 years. “Fresh China tariffs in September would raise average U.S. tariff on total imports to 5.6% from 4.5%,” Hartnett wrote.
6. Large U.S. companies have fewer investment opportunities and more cash than they know what do with: “U.S. companies spent $114 on buybacks for every $100 of capex in past 2 years,” according to BofA Merrill Lynch. “Between 1998 & 2017 they spent $60 for every $100 of capex.”7. The age of narrow leadership and mega cap dominance continues. “Just 6% of MSCI ACWI, -0.89% stocks account for 53% of year-to-date global equity returns,” Hartnett noted.
Never in the history of US Presidents have been so much into PUMPING StockMarket Ready for anything. Manipulating FED, threatening their own people. And all of this for very simple reason to take a credit for 'Strong' Economy before reelection!
Unsustainable
Everyone wanted to be Gordon Gekko.
sorry $100Mil!!!
imagine thinking $100K in liquid assets was all the Money on Earth back then?!!
what can you conclude if debt increases more/faster than growth
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