Buffett (Warren Buffett) once said that if investors concerned about his “fortune index” described in 2001, “a single indicator to measure the best state of stocks at any given moment”, investors will be aware of the collapse of the Internet bubble in advance.
this indicator is known as the “buffet index” in the investment community. The Wilshire 5000 index measures the ratio of the market value of the U.S. stock market to the U.S. GDP. When the index is in the range of 70% to 80%, it is time to sell stocks, and when it rises to more than 100%, it tends to avoid risks.
if the indicator is applied globally, as shown in this chart by Holger zscheapitz, market analyst at die welt, the sell signal is flashing. In fact, the index has just broken through a 30 month high.
zschaepitz said: “the global stock market has reached a new milestone. For the first time since 2018, the value of all stocks now exceeds 100% of global GDP. According to the “Buffett index”, the market capitalization ratio of GDP is greater than 100%, which means that the stock market is in a bubble region.
House Speaker Nancy Pelosi said she rejected Treasury Secretary Steven mnuchin’s “proposal” to restart a new round of stimulus negotiations because the White House demanded a reduction in stimulus size and refused to give in on the issue.
Pelosi said in a joint statement with Senate leader Chuck Schumer on Wednesday: “we have made it clear to the government that if they are willing to increase $1 trillion, we are willing to reduce $1 trillion. When they start to take this procedure seriously, we are willing to resume negotiations. ”
Mr. mnuchin said earlier that Congress could pass a “little more than $1 trillion” stimulus plan first, and then discuss the additional stimulus measures needed next.
data released by the U.S. Treasury Department on Wednesday showed that the budget deficit in July fell to $63 billion from $119.7 billion in the same period last year. The median market estimate is $90 billion. The deficit hit a record high of $864.1 billion in June.
in July, fiscal revenue increased by 124% year-on-year, reaching a record high, and expenditure increased by nearly 69%, reflecting the expenditure brought about by supplementary unemployment relief and small business support measures.
although the deficit narrowed in July, the total deficit in the first 10 months of this fiscal year was still as high as $2.8 trillion, an increase of $1.9 trillion over the same period last year. In February, before the economy was sealed off by the new outbreak, the office of management and budget expected a total deficit of $1 trillion for the fiscal year ending in September. Soros, a
billionaire and financial predator, said on Wednesday that he was no longer in the market bubble fuelled by the Fed’s liquidity and warned that Trump was still “very dangerous” before the November election.
“we are in crisis, the most serious crisis in my life since World War II. I describe it as a revolutionary moment, with a much wider range of possibilities than usual. What would normally be unthinkable is now not only possible, but actually happening. People are disoriented and scared. What they do is harmful to themselves and to the whole world. ”
he said: “even in the United States, confident liars like trump can be elected president and undermine democracy from within. But the United States has a long tradition of checks and balances and norms, as well as a constitution. Therefore, I believe that trump will eventually become a temporary phenomenon, which is expected to end in November. ”
However, before the November presidential election, Soros warned trump that “it is still very dangerous” because “he is fighting for his own life, and he will do all he can to remain in power.” Soros added that if trump loses the election, he will be held responsible for violations of the constitution.
the release date of the new iPhone is approaching. Apple said in its latest earnings call that the next generation of iPhones should start shipping in October.
Amit daryanani, an analyst at evercore ISI, discussed in a research paper on Wednesday whether it would make sense to hold Apple shares before the new iPhone went on sale. The conclusion is positive and continues to maintain Apple’s outperformance rating and raise its target price from $440 to $460.
daryanani wrote in the research paper: “since the iPhone is expected to be released in the next three months or so, we think it is instructive to review the relative stock price performance of the iPhone before and after the launch. Looking back on past iPhone releases, Apple’s share price performed best on average 180 days before the launch of the new device, and the stock price in the first 90 days also performed well with lower volatility. 30 days and 90 days after the release of the new machine, the average performance was not as good as the market
Eric Rosengren, chairman of the Boston fed, said the pace of economic recovery may be stalling after a surge in new coronavirus infections across the United States and forcing most states to suspend or reverse their reopening processes.
Rosenberg said on Wednesday: “despite massive intervention by monetary and fiscal policy makers, high-frequency economic data suggest that recovery may be losing momentum as economic activity in many states is once again constrained to slow the spread of the new coronavirus.”
Rosenberg raised new doubts about the feasibility of a comprehensive economic recovery and said that the new coronavirus will continue to dominate the recovery speed of the US economy. The Fed chairman, Jerome Powell, had previously expressed a similar view.
Rosenberg said: “unfortunately, as long as the virus poses a major threat to public health and people continue to avoid activities that may endanger their health, it is difficult to achieve a comprehensive economic recovery.”