BIS warns of gap between market valuations and reality
Corporate credit spreads have tightened, despite what the BIS sees as a looming solvency crisis
High market valuations appear to be at odds with a weak and turbulent economic recovery, the Bank for International Settlements warns.
Valuations in the past quarter were “stretched”, the BIS says in its latest quarterly review, published today. Some equity markets hit record highs, while bond spreads were compressed.
“The evolution of aggregate valuations appeared to be somewhat at odds with the general economic outlook,” the report notes, though it adds that recent jitters in equity markets
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