Morgan Stanley kommer med et slet skjult advarsel til investorerne: Banken mener ikke, at markedet med de store stigninger de seneste måneder har været “disconnected” fra den reelle økonomi, for den økonomiske genopretning og fremgangen hos virksomhederne har faktisk været den gode historie denne sommer. Det er ikke centralbanken alene, der har støttet markedet. Hvis økonomien i den kommende tid fortsat forbedres, kan markedet fortsætte opad. Men hvis økonomien ikke forbedres, får det virkelig indvirkning på markedet trods lav rente og centralbank-intervention.
Are Markets Really “Disconnected”?
Global stocks were up 6% in August after gaining 5% in July, 3% in June, and 4% in the month of May. Indeed, the S&P 500 has risen in 9 out of the last 10 trading days.
To explain this steady, almost mechanical rise in markets attention is focused on the action of central banks, who continue to keep interest rates at record low levels and buy assets at a record pace.
But I’m not sure focusing this much attention on central banks is right. As much as the steady rise of markets seems disconnected from the conditions in the real economy, I’d argue that actually they’re more closely related. And going forward, that is a double-edged sword.
While the economic data has been weak, the trend has been improving. And most notably over the last few months, incoming economic data has steadily, repeatedly surpassed expectations.
Based on a number of different ways to measure this, the last three months have seen one of the best runs of economic data, relative to expectations, that we’ve ever seen.
So viewed this way, what the market is doing is maybe a little bit less perplexing. The economy is a top investor concern.
Data related to the economy has been much better than economists were expecting in July and August. And this has kept happening, over and over again. This improvement, rather than any new policy that central banks have been enacting, might be the real story of this summer’s strength.
This matters as the summer ends and we enter the fall.
If data continues to come in above expectations, markets can likely continue to grind higher despite recent gains.
But if that data slows or stalls, we think that loss of economic momentum would really matter, even though interest rates are still low and central banks are still buying bonds. In short, economic fundamentals still matter, even in a market like this one.
