Signs Stock Rally is Doomed to End After $21 Trillion Rebound
(Bloomberg) — As a sense of euphoria sweeps through global equity markets propelling stocks to regain $21 trillion in value from a March low, the asset class is looking increasingly frothy.
While stock luminaries who had advocated for a bull zone look like winners in hindsight, the debate goes on about whether the rally is a bear market bounce, doomed to end. Asia ended the day up but off the session’s high, while equities in Europe slipped in early trade, with the Stoxx Europe 600 falling as much as 1.6%. It’s a similar picture for the U.S. market as S&P 500 futures were down 0.9%.
Global equities have climbed back to levels last seen in February, when the coronavirus began spreading rapidly outside of China. The 42% surge from a March low is the best advance over an equivalent time-frame since 2009 for the MSCI ACWI Index that includes stocks in both the emerging and developed world. The gauge is now trading at 20 times next year’s profits, the most expensive since 2002.