These days everything flies. They fly Bags, fly thegold, violate the raw material, Bitcoin flies and i government bonds. But he is a rally or a bubble? Il Sole 24 Ore recalled last Sunday that 18 stock markets around the world are at their highest and collecting record after record day after day. He's on the crest of a wave Wall Street and there is the Nasdaq, but also the Paris and Frankfurt stock exchanges - without forgetting that in the last 18 months the Ftse Eb grew by over 60% – and then the Asian markets (from Japan to India and Taiwan), those of South America (Peru, Chile, Ecuador) and those of Eastern Europe (Hungary, Turkey, Poland and Romania ). But, paradoxically, together with and beyond shares, government bonds, safe haven assets, gold, jewels, diamonds, watches and Bitcoin are flying. Some analysts warn that such a generalized rally is not only a rare event but has only happened 80 times in the last 6 years.
But what is behind the rally? Morya Longo, one of the most brilliant financial journalists of the new generation, sees above all two elements, beyond the macroeconomic framework which, with exceptions (see Germany), does not experience recessions, there is the still abundant liquidity which, despite the postponement of the Fed and ECB rate cuts, the central banks (China and Japan in the lead) continue to overturn the markets and there is the driving force of Artificial Intelligence (first and foremost Nvidia).
The rally and its first creaks
But how long can the rally last? It would take a crystal ball to know but some creaks are starting to be heard and require caution. Longo points out two factors that make us think. The first concerns the magnificent Big Techs which dropped from 7 to 4 because Apple and Google are slowing down and Tesla has lost over a quarter of its stock market value. The second is the decline inequity risk premium (i.e. the premium for buying shares instead of bonds) which, according to Bank of America, is at its lowest level for decades and that is since 2007, before the collapse of the Lehman Brothers. War on owls but making conjurations is a must.
