As the international markets continue to experience highs and lows, it is becoming increasingly clear that the curves are not as predictable as they used to be. Market volatility has become a reality for many, and there are signs that the financial system is suffering from stress fractures even though there are no obvious breaks yet.
The market is experiencing heavier and heavier pressure due to the increased tension between the major economies, such as the US-China trade war and Brexit-related uncertainties. As a result, investors are left confused and concerned about the future. Especially during times of uncertainly, people are more likely to move their funds out of risky investments and into safer, more predictable ones.
At the same time, investors are looking for innovative companies to invest in with new technology, such as 5G, blockchain, and AI being near the top of the list. This thirst for new technologies may be partly responsible for the overvaluation of certain stocks in the market, forcing investors to take chances on companies with little fundamental value.
In addition, the global market is being further weakened by an avalanche of capital flows and economic condtions. Low-interest rates, economic stagnation, global pandemics and other crises can lead to capital flight, leading to a liquidity crisis. This, joined with high debt levels increases the risk significantly, and further adds stress to the financial system.
While there are no clear breaks yet, these stress fractures in the global markets can signal deep-rooted issues that could eventually lead to a devastating crash. Investors need to be more cautious and examine the fundamentals of stocks before investing in order to reduce the chances of any catastrophic losses.
In conclusion, the global markets have stress fractures but no clear breaks yet. If these stress fractures are not identified and addressed quickly, they could lead to larger issues in the near future. Being aware of these underlying market conditions is the key to staying vigilant and making wise financial decisions in these turbulent times.