Despite tech boom: No speculative bubble: Goldman Sachs analysts see no signs of bubbles forming in the markets | message
Shares in this article
• “Signs of complacency and heightened optimism”
• Features do not speak in favor of bubble formation on the market
• Technology stocks particularly affected by blistering allegations
Tech boom after corona crash
With the beginning of the corona pandemic last year, the markets collapsed dramatically in March 2020. After the corona crash in spring, however, a recovery phase soon set in. It was especially shares in technology companies that quickly returned to their pre-crisis levels – and in some cases even rose significantly above them. The shares of the tech giants Apple, Amazon, Facebook, Microsoft and Google parent Alphabet also rose significantly in the past year. Due to these price jumps, however, market observers often suspect that speculative bubbles have formed on the stock market. For example, stock exchange expert Jeremy Grantham recently stated that the bull market in the US had developed into a huge bubble that could burst at any time. However, strategists at the major US bank Goldman Sachs see it differently.
No signs of bubble or bear market
According to the analysts around chief strategist Peter Oppenheimer, there are some features that suggest a bubble formation on the market, but these are not recognizable in the current market environment, as reported by the Bloomberg news agency. “There are signs of complacency and increased optimism in the market,” admit the experts in their report, which is available to Bloomberg. “Still, the fundamentals that drive the market and the early stage of the economic cycle suggest we are far from a bubble or a bear market.” Typical signs of a bubble in the market would be increased debt in the private sector or a sharp collapse in reserves. They do not observe this in the current market environment.
Tech companies with particularly rapid recovery
The analysts working with chief strategist Peter Oppenheimer explain that the recovery is starting above all in technology companies by stating that they can show rapid growth and high cash flow. In addition, the corporations concerned are in a position to transform their respective industries. A prominent example of this is Tesla stock. Due to its vehicle software, the electric car manufacturer is often assigned to both the automotive and the technology sectors and has often faced the blistering allegations due to the rocket jump in the price of its shares from 743 percent in the past year. Only recently, fund manager Per Lekander predicted an imminent burst of the Tesla bubble and drew comparisons with the dot-com bubble in 1999 Elon Musk led company is considered a pioneer in the field of electric vehicle development.
Still, Goldman analysts warn that high valuations of stocks could lead to lower returns over the long term.
Finanzen.net editorial team
More news about Goldman Sachs
Image Sources: MarcelClemens / Shutterstock.com, Chris Hondros / Getty Images