Tech stocks like Nvidia have it shot itselfgold and bitcoin prices recently touched record levelsand many on Wall Street predict a raging bull market and no recession this year.
The outlook looks almost blindingly bright, so it is perhaps no surprise that some investors, economists and analysts are worried that we are in a bubble.
They have warned that asset valuations are disconnected from reality and could collapse, and the economy is under serious pressure and was heading towards a recession.
Here are six recent bubble warnings from experts this week:
1. David Rosenberg
He 30% increase in the S&P 500 over the past year, even as corporate profits rose just 4%, was a 1-in-10 market event, the president of Rosenberg Research said in a YouTube video posted Thursday.
The former Merrill Lynch chief North America economist questioned how Wall Street could expect profits to rise 11%, or nearly three times as much this year, when GDP growth is expected to slow.
Rosenberg said he was even more skeptical of stocks at today's "exorbitant valuations" than he was a year ago, and that the fact that they were higher during the dot-com boom was irrelevant. "Still, we are in a market bubble."
2. Paul Dietrich
"The stock market bubble is about to burst: watch out!" was the title of Dietrich's comment this week.
The chief investment strategist at B. Riley Wealth warned investors The S&P 500 could collapse 49% to their pandemic lows if stock valuations regressed to historical norms and a recession spooked investors.
"This stock market has become strangely overvalued," he said, arguing that earnings would have to rise 45% this year for valuations to make any sense. "This bubble has reached this point."
3. Jeremy Grantham
Stock prices disappoint, AI is a bubble destined to burst, and a recession seems likelyGrantham warned in a report this week.
The GMO co-founder and long-term investment strategist compared the recent rise in stocks to pre-Great Depression rallies and the dot-com bust, and said the market's long-term prospects were dire at these valuations.
Grantham also suggested that the AI โโcraze would end and bring the stock market crash with it. He also believes a recession is likely as investor speculation fades and the delayed effects of the Federal Reserve's rate hikes are felt.
4. Michael Hartnett
The "tremendous euphoria" at the prospect of interest rate cuts has spurred investors to buy stocks, gold, cryptocurrencies and even corporate bonds, Hartnett told Bloomberg this week.
Bank of America's chief investment strategist said the stock buying boom has characteristics of a bubble, including the speed and magnitude of price increases, the heady valuations achieved and the narrow focus on intelligence-related companies. artificial like Nvidia.
However, Hartnett warned that US economic data has become more "ominous" with clear signs that the labor market is "cracking" and that inflation may not fall much further.
"If risk assets say, 'We don't care,' that's very symptomatic of the bubble mentality," he added.
5. Larry Summers
The former Treasury secretary this week warned investors against assuming the Fed would cut rates this year, given how exaggerated asset valuations have become.
"I certainly think we are at least at the foot of the bubbles," he told Bloomberg.
While financial markets aren't as fizzy now as during previous peaks, "it's not like we're a million miles away from that either," Summers added.
6. Michael Gayed
Gayed highlighted the recent rise in gold, utility stocks and long-term Treasuries as evidence of growing nervousness in the market in an InvestorPlace op-ed this week.
โIt is rare for these three traditionally defensive asset classes to move in such harmony and historically, this type of move has been a precursor to a broader market shift,โ said the Tidal Financial portfolio manager.
"The fact that it's happening during a speculative trading bubble screams that something could be about to burst," he added. "Be careful".
