Salient to Investors:

  • The value of equities globally is at a record $66 trillion versus $25 trillion in March 2009 and $63 trillion at the 2007 peak. The US stock rally is approaching the dot-com bubble in terms of speed, but not in valuations – at 16.8x estimated earnings versus 26x at the March 2000 peak.
  • Patrick Spencer at Robert W. Baird said significant geopolitical events are not enough to unsettle the global economic forces, especially in America, while Draghi is ready with further measures to stimulate growth.
  • Andrew Milligan at Standard Life Investments said we are moving from QE to conventional policy, rates moves only because central banks believe growth is sufficiently strong.
  • Oliver Wallin at Octopus Investments said the markets are complacent, given a lot going on in the background that warrants more concern.
  • Guillaume Duchesne at BGL BNP Paribas said rich valuations in the US are not a problem because economic momentum is good and investor sentiment is positive. Duchesne said equities will continue to be the best asset, but investors need to focus on markets with the strongest fundamentals because we have moved from a liquidity-driven market into a fundamental-driven one.

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