By Jeffrey Goldfarb
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
As Wall Street hit another new record Thursday, it is worth considering what could cause a serious setback in stock market prices around the world. Since I started writing this column in 2012, I have repeatedly argued that the rebound in stock market prices from their nadir in the 2008-09 global financial crisis was turning into a structural bull market that could continue into the next decade.
With the stock market continuing to hit new highs almost daily despite the appalling geopolitical disasters and human tragedies unfolding in Ukraine, Gaza, Syria and Iraq, there has been much head-scratching about the baffling indifference among investors. Many economists and analysts see this apparent complacency as a symptom of a deeper malaise: an “irrational exuberance” that has pushed stock prices to absurdly overvalued levels.
Last year was one that most emerging market investors would probably like to forget. MSCI's main equity index fell 5 percent, bond returns were 6-8 percent in the red and some currencies lost up to 20 percent against the dollar. Here are some flow numbers from EPFR Global, the Boston-based agency that released some provisional annual data to its clients late last week.
The frontier markets juggernaut continues. Here's a great graphic from Bank of America/Merrill Lynch showing the diverging fund flow dynamic into frontier and emerging equity markets.
By Matthew Goldstein
It started slowly but the push by Wall Street into the single family rental market is fast becoming a Main Street play as well.
By Matthew Goldstein and Jennifer Ablan
Big money managers do not always agree--that's what makes a market--but if there was one consensus coming out of our just concluded Reuters Investment Outlook Summit, it's that next year will probably be another bang up one for the bond market.
Here's to getting out exclusive stories fast when need be. This week, pay close attention to Jamie Dimon, who will be on the congressional hot seat as he deals with questions over JPM's $2 billion plus trading loss. And without further ado, here's Sam Forgione's weekend reads: