Investors question the relevance of the current level of share prices. The economists of natixis Two conditions stand out which, if fulfilled, imply that -in the US and the Eurozone- the stock markets are not overvalued.
There are two conditions which, if met, imply that current share prices are not overvalued
The The first condition is that real long-term interest rates (currently 1% in the US and 0.5% in the Eurozone) do not rise significantly. This condition is difficult to meet: the increase in public and private investment linked to the energy transition, water management and industrial relocation is likely to cause a shortage of savings and therefore a rise in real interest rates long-term.
The The second condition, especially in the United States, is that artificial intelligence generate additional productivity gains.. Opinions differ on this issue, but it can only be said that the Internet has been associated with a marked decline in productivity gains, whereas the opposite was originally believed (in the late 1990s).
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
