Robert M. Almeida: Global stock markets in the second half of 2022 - What you need to know as a financial expert

Robert M. Almeida: Global stock markets in the second half of 2022 - What you need to know as a financial expert

According to a report by www.dasinvestment.com,
The article highlights how the rise in global stock markets is being influenced by enthusiasm for artificial intelligence, falling inflation numbers and improving economic data. However, earnings expectations remain weak, leading to increased valuations. Risk premiums are also low and are reminiscent of the dot-com bubble. The companies' valuations are high, especially when compared to sales. The low cost of capital and labor is a thing of the past, so the new era requires different tools for valuing stocks.

In addition to the information from the article, it can be noted that low earnings expectations and rising stock prices lead to overvaluation. The development of the price-to-sales ratio shows that valuations are high despite weak economic and sales growth. This is reminiscent of the dot-com bubble and shows increased risk for investors.

The low cost of capital is over, the cost of capital and labor has increased, and companies will struggle to cover their new or returned to normal factor costs. This is likely to lead to defaults, capital restructurings and bankruptcies. Investors must adapt to this new reality and adapt their valuation models and fundamental analysis tools accordingly.

Overall, the valuation of stocks in the current market situation is viewed critically. The low risk premiums and high valuations relative to sales indicate potential risks for investors to consider. As a financial expert, I see opportunities and challenges that require flexible and comprehensive analysis to support investors.