U.S. stock market trend is good, the NASDAQ index hit record highs. However, on the other side, it also caused market concern, believing that the upward trend of US stocks is unsustainable, because the bull market trend of US stocks is not supported by economic fundamentals, but mainly driven by liquidity. The fundamental reason is that the US Federal Reserve has taken an unprecedented release this year.
Recently, the dialogue between investors and George Soros has received much attention from the media. He said in an interview that this is the most dangerous moment he has seen since World War II. The US stock bubble has already emerged and he will not participate in the current bubble market.
On the other side, Warren E. Buffett had a similar signal coming out. According to the latest financial report of Berkshire Hathaway, Warren E. Buffett reduced its holdings of Wells Fargo, JPMorgan Chase, MasterCard, visa, M & D; t bank, PNC finance, New York Mellon bank; Warren E. Buffett also emptied Goldman Sachs Group, Delta Airlines, Southwest Airlines, United Airlines, American Airlines, Occidental oil and resturant brands.
Warren E. Buffett has $146.6 billion in cash reserves, equivalent to about 1 trillion yuan, after selling a large number of U.S. stocks. Holding such a large amount of cash was rare in Warren E. Buffett’s investment career. It is worth noting that Warren E. Buffett bought a lot of gold stocks in the second quarter: Barrick gold. After the release of the relevant report, the price of Barrick gold rose sharply after hours. Data show that Barrick Gold Corporation of Canada is one of the largest gold producers in the world, mainly engaged in the exploration, development, production and sales of gold in various regions of the world.
So what does Warren E. Buffett mean by shrinking the battle line, storing up a lot of cash and buying gold stocks? Is it the same as George Soros’s public speech?
In fact, after several times of quantitative easing by the Federal Reserve, a large amount of money circulates in the market, which makes the overvalued U.S. stocks more risky, and the rebound of the stock market brought by the loose liquidity is only a false impression. As of recently, the price earnings ratio of the US stock market has reached the highest level in the past 13 years. The current price earnings ratio of S & P 500 is 33.39 times, and that of NASDAQ is 59.59 times. This means that US equity valuations are a little closer to pre-2008 financial crisis levels.
On the other hand, the U.S. stock market and the real economy have begun to run counter to each other. In the second quarter of this year, the United States suffered the largest economic recession in 40 years, and the number of unemployed people exceeded 30 million. However, after a short period of decline, the U.S. stock market has reversed V-shaped, and the speed and amplitude of the rebound are amazing.
Judging from all kinds of signs at present, whether it is Warren E. Buffett and George Soros’ speech and behavior, or the valuation of the stock market, or from the fundamentals of the U.S. economy, to sum up, there are some signs of risk in the US stock market, which needs the attention of investors.