Many opinions and rumors around the U.S. stock market recently formed visibility bubble ready to burst soon. But whether things really stand ? According to analysts TeleTrade, today is no bubble in the U.S. stock market is not. However, after such a long period of growth , investors should be prepared for the period of low yields of 1-3% in the coming years .
Today, many analysts and economists agree that the S & P500 index is overvalued by 65% , resulting in a quite expected downward correction in the near future . But if you say that such overvaluation – still not a bubble , the level at which asset prices can talk about the formed bubble ? According to analysts TeleTrade, talk about the bubble is placed if the shares rise in price by 30% , and prices of individual securities are higher than 100 % of its real value. While this is not observed .
Furthermore, for forming a true bubble must perform two important conditions . First, the markets should dominate rather boring statistics with weak dynamics. Secondly, the need to feel extreme enthusiasm of investors.
As regards the first condition , the current position of the index are in the standard deviation of the normal distribution parameters (around 1.4-1.5 sigma ) . If the deviation is 2 sigma , then it will be an indicator of growth by 30%. Ie must be established on the level of growth in 1860 to 2350 . This , accordingly, we do not observe .
According to the second condition is also a special euphoric investors not observed. Lull in the medium investors , which is observed from the beginning of the year continues, which is a completely logical explanation. Above all, such reluctance to review portfolios associated with a number of steps regulators , as well as the new geopolitical factors. Care of risky assets and emerging markets in a more stable zone and defensive assets can , of course, increase the demand for the bond market, but rather, it will be government bonds and treasury notes.
Thus, the hype surrounding the imminent collapse of the expectations of the bond market , more like a bubble, which is likely to be blown away by itself soon.