Financial markets worldwide have risen a tremendous amount this year, led by the U.S. Offsetting global economic weakness, monetary policy been excessively accommodative as inflation has been running well beneath their 2% threshold that most monetary authorities have targeted as a long-term objective. Therefore, interest rates have been ridiculously low, even negative in many parts of the world, such that investors have been forced to move out on the risk curve buying equities with, in the most case, dividend yields far in excess of 10 government issued bonds.
We have argued consistently over the last