Wealth DFM 11 | Is the stockmarket bubble about to burst?

by | Mar 14, 2024

As Q1 of 2024 draws to a close, the relentless charge of the Magnificent 7 continues with hardly a pause for breath. That’s been especially evident following Nvidia’s latest results in February which showed revenues up a staggering 265% on the back of their booming AI business. Recent share price gains have led to both the Dow Jones and the S&P 500 indices hitting new all-time high levels. 

But the surge in prices hasn’t just been limited to the US.  In February, the Japanese stockmarket also reached a new all-time high – in this case after a phenomenal 34 year wait. With much more positive sentiment towards Japanese investment, we share the latest views from Cazenove Capital’s Caspar Rock on page 8 on a resurgent Japan, entitled ‘Back in vogue: Japan’s stock market renaissance’.  Spoiler alert* he’s quite positive on prospects! 

Add to that market strength in Japan, the onset of new peaks for the German stockmarket, gold and even bitcoin, have fuelled the debate as to whether we’re seeing the latest stockmarket bubble – and, naturally, whether it’s set to burst? Of course, the UK hasn’t quite joined in the fun, with the tech-lite FTSE 100 index still some way below it’s 2023 peak. 

Views from the coal face   

In this edition of Wealth DFM magazine, we’re grateful to this month’s commentators for sharing their latest thoughts with us, including their thoughts as to whether we’re in ‘bubble’ territory or not.  They are: Kristina Hooper from Invesco, Chris Ainscough of Charles Stanley, Caspar Rock of Cazenove Capital and also to Artemis’ Mark Niznik for his unusual comparison of fund management and rock stars. And yes, if you’re scratching your head on that one too, I strongly recommend reading Mark’s explanation on page 5 -it’s a great read IMHO!

In other news…   

It can’t have escaped Wealth Managers’ attention that there was the small matter of the UK Spring Budget taking place earlier in March. Whilst there were few measures directly affecting the day-to-day business of wealth management, it was interesting to note the mix of politics and economics as we wonder when the next UK General Election will be called. It seems that the chances of a 2nd May Election are fading, although the  prospect hasn’t been ruled out by Prime Minister Sunak just yet. We shall have to wait and see. 

Across the pond, a certain Mr Trump looks set to be the Republican candidate to set up a repeat of the Biden v Trump contest that we saw in the 2020 election. Brace brace…!!!  

In the meantime, market watchers will have all eyes fixed on the Central Banks as we wonder when the first rate cut will appear and thereafter who will follow. 

We’ll be following all the latest news and views here on www.WealthDFM.com so please do come along for the ride. Somehow, I think it’s going to be an interesting one. 

Sue Whitbread 
Editor | Wealth DFM Magazine

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