The pillars that had underpinned financial-market gains for years have been shaken
— a series of key assumptions that investors across the world were banking on —
They look, in hindsight, a bit naïve: the US economy is unstoppable; artificial intelligence will quickly revolutionize business everywhere; Japan will never hike interest rates — or not enough to really matter.
The one-two-three punch jolted investors into suddenly seeing the peril inherent in, say, bidding Nvidia shares up 1,100% in less than two years or loading up on junk-rated loans bundled into bonds or borrowing money in Japan and plowing it into assets paying 11% in Mexico.
In the span of three weeks, some $6.4 trillion has now been erased from global stock markets.
Bloomberg 6 augusti 2024 at 12:27 CEST0
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