The expert magazine of Ostrum AM

Topic of the week: Stocks are too expensive? Really?

  • It is undisputable that stock market valuations are very stretched when compared to historical standards. Some metrics are even at an all-time high.
  • But taking into account the level of risk-free rates, valuations appear justifiable or even reasonable. In particular the low level of yields has a mechanical impact on the discount factor, with the consequence of lifting multiples.
  • Finally, we find that elevated valuations are a signal of market correction only if profits are unusually high as well. This is not currently the case.


Market review: Powell waiting for a sign from Congress

  • Fed keeps status quo, may adjust QE to incoming data
  • US curve steepening continues with 5s30s above 130bp
  • Equities buoyed by continued monetary accommodation
  • ECB to fully absorb net German bond issuance in 2021


MyStratWeekly : Market views and strategy

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  • Stéphane Déo

    Stéphane Déo

    Head of markets strategy

  • Axel Botte

    Axel Botte

    Global strategist

  • Aline Goupil- Raguénès

    Aline Goupil- Raguénès

    Developed countries strategist

  • Zouhoure Bousbih

    Zouhoure Bousbih

    Emerging countries strategist