US Stock Market: A Bubble of Epic Proportions or Booming Opportunity? Rockefeller International’s global market analyst, Ruchir Sharma, stated that the current dominance of the US stock market leads to the depletion of wealth from other global markets, weakening national currency, and ultimately causing deceleration in economic growth.
As Sharma put it, the US stock market has become the ‘mother of all bubbles’ that lure large amounts of money out from international markets and establish what can potentially be a dangerous position. A Financial Times report as late as October gives a clear picture of how, for the first time in history, global investors are investing massive amounts of money into the US stock markets, and hence, this shows an incremental trend of the influence it wields.
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US Stock Market: A Bubble of Epic Proportions or Booming Opportunity?- American firms now control 70 percent of the world’s top-listed stock index, up from 30 percent in the 1980s. This strength is due to better returns by US businesses than their global counterparts; hence, the US stock market is the most favorable investment destination for global investors.
Although this is a positive trend for the American economy, it raises concerns. It is crucial to approach the problem of such concentrated investment cautiously, as some market experts have warned that the situation cannot go on, and once the bubble bursts, the market may fail.
Nonetheless, the American stock market remains primarily bullish throughout 2024, especially after the November polls, especially the S&P 500 and NASDAQ Composite. However, it is pertinent to highlight that the US stock market is not in a recession.
A recession is a long period of economic contraction highlighted by a low GDP, employment, and industrial output—none of those conditions are currently present. However, the overwhelming influence of the US stock market on the world economy is still controversial among scholars.
