There are several dynamics currently at play in the global equity market that are rather unprecedented, whether that’s the sustainability of profit margins, the monopolistic power of several popular large-cap U.S. tech companies, or central bank policy.
Profit margins usually have a strong mean-reverting tendency, yet they’ve remain elevated, particularly in the U.S. At the same time, the dominance of FANMAG stocks (Facebook, Apple, Netflix, Microsoft, Amazon and Google) has created substantial barriers to entry in their respective markets. Then there is the massive impact stimulative monetary policy has had across the globe — all of which has investors constantly grappling with the question of where the market truly stands.
Read more at Financial Post