As shown in the Dips Report 'US Households Now Record High Exposure to Equities '
As inflation rose in the United States, following the massive stimulus issued by the Federal Reserve, investor and financial writer Lyn Alden Schwartzer released a report which shows that " the United States lHouseholds now have record exposure to equities. The news comes at a time when many analysts and economists believe the stock markets are in a colossal bubble.
Dow drops 900 points, financial expert Lyn Alden Schwartzer releases report on US Household Exposure to Equities
Stock markets experienced significant carnage on Monday as the Dow Jones Industrial Average lost 900 points in the morning (EDT) or 2.3% as it s This was the biggest drop in value this year. Likewise, the Nasdaq Composite came very close to losing 1% and the S&P 500 index lost 1.5% on July 19. Consumer media reports attribute the market downturn to the recent surge in Covid cases around the world and the delta variant.
Meanwhile, Travis Kling, the crypto promoter andthe framework of Ikigai Asset Management shared a tweet from financial expert Lyn Alden Schwartzer who said: “US households now have record exposure to equities. Kling also spoken issue and pointed out that the Fed could turn it into a national security issue.
"It's been over a year since I said that the SPX hike is a national security issue for United States. The Fed has the capacity to do this (for now). What do you think they will do? Kling asked.
Schwartzer don 't just tweet about stocks held by US households because the investor has also posted a blog post on the subject on Seeking Alpha. The financial analyst said that last May, the researcher released a report that highlighted how the United States is currently being fueled by US inflation. 'budgetary origin ". In the latest report, the analyst says " this is what the United States is going through right now. "
" Due to the effects stimulus and rapid growth in the broad money supply, "notes Schwartzer's report." LConsumers have more money in their pockets to spend, while the production of some supplies and services remains limited in some ways. this combination leads to an increase in the prices of the constrained goods and services, until these increase enough to reduce demand. "
Schwartzer:" Treasury bills do not keep up with inflation and therefore lose power purchasing "
Schwart zer further explains that" the effects of budget-driven inflation still occur, with average price increases of 5.39% of a year over year. ”Meanwhile, interest rates on bank accounts and treasury bills (treasury bills) are considerably low.
While showing a chart of the St. Louis 3-month Fed Treasury Bills, Schwartzer remarks: in the long run, that is, the interest rate paid by Treasury bills less the prevailing consumer price inflation rate. Schwartzer's analysis adds:
In addition to US household equity allocations, Schwartzer points out that a big risk the markets are currently facing is "this new wave of cases delta variant virus ". The economist also points out that this is "the first time that the US stock market has reached 200% of the size of US GDP ".
The investor is optimistic aboutr the energy sector but sees Covid cases and "government lockdown responses as a short-term risk factor for a correction in the industry. This means the energy market could stop inflating for a brief period, says Schwartzer. While Schwartzer is bullish on the energy sector, the investor also referred to a bitc oin (BTC) as well as in a recent video posted by the Financial Monster Youtube channel.
In addition to inflation of Tax-related, the number of US homes granting shares is also driven by rising prices and speculative investment, details Schwartzer's report. household allocations to equities currently represent a percentRecord level in total US household assets, resulting from a combination of high valuations and speculation. "
What do you think of Lyn Alden Schwartzer's valuation and The current record US household exposure to equities? Let us know what you think of this topic in the comments section below.