Alcistas, Bubble and Swifconomics markets

“It was the best of time, it was the worst of time, it was the era of wisdom, it was the era of nonsense,” Charles Dickens wrote. That rightly captures the dislocation between political events and market action as we advance in next week.

The closure of the United States government has fueled concerns about its adverse impact worldwide, but it does not seem to have damping the feeling of risk in the main capital markets. The political dead point in Washington, DC seems to continue next week, with concerns that the Trump administration could use fund freezing to permanently reduce roles and cancel certain projects.

While there has been a lot of research on what an extended shutdown could mean for shares, the main US indexes and Europe have been maximum notches. That occurs when the fund flows the data of the Bank of America show that $ 26 billion moved to global shares during the week that ended on October 1, with a record of $ 9.3 billion in the technology sector.

But in the midst of this optimism, another narration is growing. An increasing number of market participants warn that bubbles are being formed in parts of the market, and some say that this could lead to larger market correction.

The saxual warning is “not predicting, preparing.” In a recent note, the bank said that “mood could hardly be conflict more. Capital rates are close near the maximum records … However, the feeling of the consumer remains close to the historical minimums”, encouraging investors to diversify to protect against instability.

There are red flags in credit markets in particular. Barnaby Martin, from Bank of America, told “Squawk Box Europe” that his recent survey showed that credit investors have one of the “greatest overweight in the 20 years of history” of that survey, warning that there were growing concerns about the bubbles of the market.

Last week, the manufacturer of US car parts. Famous Short Seller Jim Chanos He told The Financial Times He “suspects that we are going to see more of these things,” warning that the increasingly expansive credit market has echoes of the high -risk crisis.

A bubble that does not seem to be at risk of exploding is the one that was formed around the popular pop star of multiple Taylor Swift awards. His last album “The Life of A Showgirl” was launched worldwide after months in advance for fans. It follows its record of records that exceeded $ 2 billion for sale of tickets alone.