NEW YORK, July 20 (Reuters) – In this manic era of meme stocks, cryptocurrencies and real-estate bidding wars, studying the history of financial markets might seem a little dry and old-fashioned.
Except to Jeremy Grantham.
The chairman of the board of famed asset managers GMO is a certified bubble-ologist, fascinated by how and why bubbles emerge. Grantham studies classic ones like 1929, but – now in his eighties – he has also lived through (and called) numerous modern booms and busts, including the dot-com wreckage in 2000, the bull market peak in 2008 and the bear market low in 2009.
In case you did not know where this is headed: He says we are in a bubble right now.
Buying condition keep dropping in US
moar stimulus checks are needed pic.twitter.com/QC3p61U9xu
— 🅰🅻🅴🆂🆂🅸🅾 (@AlessioUrban) July 23, 2021
Brutal Ponzi gains at ATH on a handful of key stocks while most stocks have actually been dumping like no tomorrow… Nasty scam t.co/OKIU53CZGm
— Mr Foxnose (@asymmetricalpha) July 23, 2021
This chart shows us, market expectations is const 70-90 on each PMI and without possibility to slow down… It's now priced to perfection…
Australian Services PMI just crashed to 42 … Few moments after Chinese credit impulse has vanished. No coincidence in Australia here… t.co/tvA2SFf78t
— GregTheAnalyst (@Analyst_G) July 23, 2021
Large Caps see a nice rally and are now down less than half a percent from a 52-week high.
Meanwhile, Mid, Small, and Micro Caps continue to struggle and are off 4-8% from prior highs.
The theme of the last few weeks has very much been about mega cap stocks driving the ship. pic.twitter.com/8seRErqv7G
— Andrew Thrasher, CMT (@AndrewThrasher) July 23, 2021
For those who think the S&P 500's Forward EPS has risen a lot pic.twitter.com/MfxQLryoKH
— Not Jim Cramer (@Not_Jim_Cramer) July 22, 2021
— VIX Squared (@vixsquared) July 23, 2021
— CrossBorder Capital (@crossbordercap) July 23, 2021
The $10.6 trillion U.S. corporate debt markets are at an inflection point. Last year’s turmoil is in the rearview mirror, and companies are ramping up all the shareholder-friendly activities they couldn’t do during the pandemic — and looking to fund some of it with debt.
After US Services PMI (and ISM) unexpectedly plunged from record highs in June, analysts expected the plunge to stop in preliminary July data (despite an ongoing downtrend in ‘hard’ economic data performance)… they were wrong.