The expert magazine of Ostrum AM

Read our market review and find out all about our theme of the week in MyStratWeekly with our experts Stéphane Déo, Axel Botte, Aline Goupil-Raguénès and Zouhoure Bousbih.
 
This week:

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