Signs Suggest that Global Stock Market would Stop Rising

WikiFX News (14 June)- Global stock market has recovered a value of US$21 trillion from the low in March, but the bubble in this asset class seems to keep increasing and the upward trend might stop.

At present, the global stock market has recovered to the level before the coronavirus epidemic began to spread rapidly around the world. Paul Sandhu, head of multi-asset quantitative solutions and customer consulting for BNP Paribas in the Asia-Pacific region, said: “This round of rebound is caused by the government's support for the economy.” A large amount of funds from global governments, easing of restrictions and shockingly positive employment data from the United States are attracting more buyers to participate, bringing more momentum for the stock market to rise.

However, the market still keeps a cautious attitude, for the rise in global stock prices last month is purely due to multiplier expansion, while earning expectations have barely changed since May. In addition, the MSCI Global Index has been in the overbought range since the beginning of this month, and the index's relative strength indicator has hit its highest level since January, which is considered as a bearish signal.

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