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Debt is on the rise! You may ask, what does this mean? This means that against the backdrop of large debts, the world's central banks are printing a large amount of money, but countries have not begun to produce more, and the quality of life of people has not improved.
Financial markets have become weak, but the FED has not even raised rates yet, only announced as much. But why have financial markets risen in past years? Most likely because the FED (Federal Reserve System) boosted them artificially.
Netflix shares fell 20% due to low subscriber growth; Shares of Goldman Sachs fell 7% due to a 13% profit cut etc.
What will happen next? If there is no new bailout and stimulus in the US, company returns will not look good compared to previous years. One simple rule says that if a company does not achieve planned returns, then investors are paying for it. This rule describes the Shiller PE Ratio index. It shows the ratio of a company's share price to its earnings. We see that the Shiller PE Ratio index is overheated now, and usually, an overheated index leads to a fall in the markets; this is happening now. [link] [comments] |
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