In recent times the markets have gone through a risk appetite phase which has allowed several stock listings, globally, to achieve new historical highs. But he wasn’t alone in gaining ground l’equity; also the Bitcoin updated 2021 records and even They recorded a new peak (apparently a contradiction, given that the metal represents the safe haven par excellence). Let’s see in more detail how to interpret this period and what could happen in the future, with a particular focus on a possible reversal of the markets.
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Stocks at historic highs
Since the beginning of 2024, the S&P 500 index has updated its all-time high 17 timesbut also the Nasdaq hit new recordsdriven above all by giants such as Nvidia, Meta Platforms, Amazon and Microsoft, which counterbalanced the disappointing performances of other Big Techs such as Apple, Alphabet and Tesla.
Beyond Wall Street, also the Nikkei Japanese reached new heights, while in Europe the Dax German and the Cac French have reached historical peaks and the Ftse Mib travels at 2008 levels. Pure l’MSCI World set a recordsurpassing the highs of early 2022.
Signs of cooling of inflation and the perspective of rate cuts by central banks. Not even the latest indications from macroeconomic data, which suggest more caution regarding monetary easing in 2024, have made a dent in the markets’ optimism.
New records for Bitcoin and gold
Meanwhile, the Bitcoin surpassed $73,000 for the first time, shattering the previous record in the $69,000 area, supported above all by the approval of ETFs in the USA and the prospect of the halving in April. A rally also extended to other cryptocurrencies, in the wake of the expectation of similar measures, in other countries (such as the United Kingdom) or on other digital currencies.
Pure Theywhich usually benefits from the most uncertain phases thanks to its ability to maintain value over time, reached a new high at $2,195 an ouncebenefiting from central bank purchases and, probably, from the next scenario of decreasing rates.
The factors supporting asset classes
To provide greater clarity on the current market dynamics we have collected the opinion of theindependent analyst Andrea De Gaetano.
Regarding the reasons supporting this ‘risk on’ scenario, “expectations of interest rate cuts represent the main reason, but the explanation is more complex than it seems.”
First of all, “The stock market has seen better-than-expected quarterly results and the recession that almost everyone expected has not yet occurred.”
Secondly, “the slowdown in monetary stimulus by central banks was partly offset by fiscal stimulifrom which however the States emerge more indebted”.
As regards the anomaly relating to theorofor the expert the main driver consists of “large purchases by central banks”while “Bitcoin benefits from the SEC’s legislative ‘legitimation’ with cryptocurrency ETFs.”
Correction time? Here’s what can happen
After such an overwhelming rally, many are wondering whether a correction phase may soon arise.
In answering this question, De Gaetano quotes an old stock market saying, according to which it is better “not to make predictions and not to ask them”, even if believes that “a correction is around the corner”.
Beyond a possible “geopolitical black swan”, according to the analyst “the game changer could be a revision of corporate profits, combined with yet another misjudgment by central banks, with rates that, instead of falling, remain high”.