Bulls, bubbles and swiftomical markets

“It was the best time, it was the worst time, it was the age of wisdom, it was the age of madness,” wrote Charles Dickens. This captures the dislocation between political events and market action as we enter next week.

The closure of the American government has attracted its concerns about its negative impact on a global scale, but it does not seem to have attenuated the feeling of risk on the main stock markets. The political impasse in Washington, DC seems to continue next week, with concerns that the Trump administration could use the financing freezing to constantly reduce roles and cancel certain projects.

Although there has been a lot of research on what prolonged closure could mean for the actions, the main American and European indexes have made again. This occurs when the Flows Fund data from the Bank of America show that $ 26 billion was transferred to global stocks during the closed week on October 1, with a record of $ 9.3 billion in the technology sector.

But in the midst of this optimism, another story is developing. An increasing number of market participants warn that bubbles are formed in certain market parts, some saying that this could lead to a larger market correction.

Saxo’s warning is “don’t predict, prepare yourself”. In a recent note, the bank said that “the atmosphere could hardly be more conflict. Actions indices hover over the record summits … But consumers’ feeling remains close to historic stockings”, encouraging investors to diversify to protect themselves against instability.

There are red flags on the credit markets in particular. Barnaby Martin de Bank of America told “Squawk Box Europe”, their recent survey has shown that credit investors had one of the “biggest overweights of all 20 years” of this survey, warning that there were increasing concerns about market bubbles.

Last week, the manufacturer of American cars First Brands filed for a bankruptcy after revealing a stack of debts of $ 12 billion thanks to the use of the financing of the leaves outside the balance sheet. The famous seller runs Jim Chanos told Financial Times that he “suspects that we will see more of these things”, warning that the increasingly large private credit market has echoed the subprime crisis.

A bubble that does not seem at risk of burst is that formed around the pop star on several times Taylor Swift. His latest album “The Life of a Showgirl” was released worldwide Friday after months of anticipation for fans. He followed his record ERA tour which exceeded $ 2 billion in ticket sales.