18d • General discussion
Important… could a stock market sell off be inevitable?!
Interesting perspective coming out from the Bank of England today.
They’re suggesting that equity markets look overvalued right now, and when you step back and look at the bigger picture, it’s not hard to see why.
We’ve still got geopolitical tension in the background, particularly around Iran and oil. Inflation hasn’t fully disappeared, and interest rates are still relatively high. Yet despite that, markets have held up pretty well and risk hasn’t really been repriced.
To me, this creates a bit of a disconnect.
On one side, you’ve got a fragile macro environment with plenty of potential triggers. On the other side, you’ve got markets behaving as if things are under control.
That doesn’t mean markets will suddenly drop, but it does suggest that risk may not be fully priced in right now.
It’s one of those environments where things can stay calm… until they’re not.
Definitely something I’m keeping in mind when looking at setups across the board.
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Important… could a stock market sell off be inevitable?!
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