But there is one bubble that seems to be flying under investors radars: food prices.
Société Générale s market strategist, Albert Edwards, thinks there is a bubble forming in food prices and it could have major consequences.
The long-time market bear first flagged the issue in a December 17, 2020, research note. Now he is reiterating the message on January 14.
Edwards has been watching the UN s Food and Agriculture FAO Food Price Index (FFPI), an index that tracks changes in the international prices of the most globally traded food commodities, such as oilseeds, dairy products, meat and sugar.
The FAO Food Price Index has been surging. In December 2020, the index hit a three-year high, following a consecutive increase across seven months.
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Bank of America s Bull & Bear indicator showed sentiment climbed on a 1-10 scale to 7.1 last week from 6.7 on December 17.
This prompted Bank of America s chief investment strategist, Michael Hartnett, to say in a January 7 note that investors were rationalizing increasingly irrational price action on Wall St.
Hartnett laid out six warning signs to watch that could signal a bear market is beginning.
Investor sentiment has climbed from rock bottom in March to what is now approaching extremes on the other end of the spectrum and it s starting to worry Bank of America s top strategist.
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Market strategist Sven Henrich, who warned of the crash before it occurred in February 2020, says we are staring at the largest valuations and technical disconnects ever.
He said the difference between current price levels and exponential moving averages shows stocks are again due for a pullback.
On February 20 last year, right at the market s top, Sven Henrich reiterated a warning. From my perch this market is the most dangerous we ve seen since 2000, Henrich, the founder of NorthmanTrader, wrote in a post on his site.
Over the course of the following month, the market would go on to shed 35% of its value as the global pandemic worsened.
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