Exuberant investors are once again piling into hype-driven growth and “meme” stocks, but market experts say cooler heads should prevail.
Central bankers and economists continue to warn a global recession is possible if inflation is not brought under control and consumers start to curb their post-pandemic spending.The MSCI All Country World Index, which tracks the performance of global sharemarkets, rose 9.5 per cent in the month to August 18, while the technology-heavy Nasdaq Composite firmed 13.9 per cent.
Fuelled by chatter in social media forums such as the notorious WallStreetBets on Reddit , “meme stocks” benefit from the sentiment.Beyond surged almost fivefold in the month to August 17. Cinema chain and Reddit favourite AMC Entertainment’s shares rose 29 per cent. The “return of the meme stock frenzy”,, was not just a US phenomenon. Social media agency Meltwater estimates a third of the BBBY mentions on Reddit recently were from Australian-based users.
While the global market has come back about 10 per cent in the past month, the MSCI ACWI is still down 13.4 per cent year-to-date. The Nasdaq Composite is down 18.2 per cent year-to-date.Whether the recent rally is the bull market’s return or just a dead cat bounce is anyone’s guess, Rasiah adds. That’s why in his view it makes sense for some investors to buy shares at relatively depressed prices.
“While growth stocks remain vulnerable to a broader equity market decline – especially if the US goes into recession – they may not necessarily underperform a lot further.”In other words, we may have seen the bottom . But that doesn’t mean Bassanese thinks investors should blindly load up on equities.
For the tech sector, that meant valuations went from an “expensive” 29.6 times earnings to a more “reasonable” 21 times earnings, which was below the long-term average of 22.1 times. However, following the rally of recent weeks, valuations are back above the long-term average. “I am not chasing the rally and consider the strength in the US consumer like the Australian one is going to fade as the rate hikes affect consumption.”Whether investors choose to do otherwise should depend on their risk tolerance, Ecuyer says – and “whether they can stomach another sell-off”.P [500] were to fall to the June lows, then prices could fall around 20 per cent and some of the stocks that have doubled off the lows may experience the more aggressive selling.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Australia news live updates: Follow liveMorrison’s meme spree on secret ministries ‘no laughing matter’, PM saysFollow live
Read more »
Australia news LIVE: Scott Morrison’s office responds to meme backlash amid portfolio saga; industrial relations debate brews after unemployment rate hits 48-year lowScott Morrison’s office says last night’s social media post making light of revelations he secretly held five additional portfolios while prime minister was all the doing of the now-Liberal backbencher, not a member of his social media team.
Read more »
Liz Cheney considers run for president after Republican primary defeatWyoming congresswoman says ‘It’s something I’m thinking about’ after losing to Trump-backed challenger
Read more »
Seven West Media joins News Corp, Tripp for WA TAB playKerry Stokes-backed Seven West Media is making a surprise bid for a piece of Australia’s $5.2 billion-a-year wagering market, starting with Western Australia’s up-for-sale WA TAB.
Read more »
HK billionaire just testing the market on AlintaChow Tai Fook, backed by Henry Cheng, is said by sources to have no current intention of selling Alinta, but there have been approaches amid the fast-changing power and gas market.
Read more »
The suburbs where landlords are reaping positive cash flowMore than half of all unit markets nationwide and a third of all house markets are now achieving high enough rental yields to generate a positive cash flow.
Read more »