Are stockmarkets heading for a fall?

America’s S&P 500 stockmarket index has gained 30% over the past year. Valuations may be high, but that doesn't necessarily mean investors should sell. High valuations can always go higher. 

US Federal Reserve building
The US Federal Reserve could rattle markets when it tapers its bond purchases
(Image credit: © Getty Images)

Are stockmarkets too quiet? asks John Authers on Bloomberg. America’s S&P 500 index has gained 30% over the past year. Its climb has been serene. Since the 2020 US presidential election, the index has not once fallen so much as 5%.

The economist Hyman Minsky noted that “stability creates instability”: periods of calm “lead to overconfidence and excessive speculation” that sow the seeds of a future crash. The debt markets certainly look complacent – yields on US junk debt are at their lowest ever level, reflecting record prices.

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Markets editor

Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019. 

Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere. 

He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful. 

Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.