Investors believe that the stock market is currently based on pure speculation, ignoring the economic reality and warn of a possible crash in the stock market, CNBC reported .After a sell-off in March when the new coronavirus pandemic spread across the globe, stocks have risen despite serious problems for world economies.
According to David Sokulsky, the chief executive of the Concentrated Leaders Fund, the fundamental economic and corporate data “is not as good as the prices in the stock markets.” In his opinion, at the moment, the markets do not respond adequately to the risks that exist in macroeconomics and are acting “purely driven by speculation”, taking advantage of excess liquidity in the system.
The expert points out that this situation cannot “last forever” and warns that a bubble environment very similar to that experienced since 2000, when the dot-com bubble burst, is being created.
Jonathan Sheridan, chief investment strategist at the Fiig company shares Sokulsky’s concerns, adding that the lost jobs and downturn in the economy will translate into “significant bankruptcies and a significant reduction in economic activity,” of which no one could. escape. “Even if we achieve a very rapid recovery, the damage to the economy will be much greater than currently calculated,” concludes Sheridan.