Market news
23.11.2020, 15:38

S&P 500 Index: There is room for a 3% rise before reaching equilibrium - Natixis

FXStreet reports that analysts at Natixis estimate that the US stock market index is almost at its equilibrium level, but that the eurozone index is still 20% below its equilibrium level. 

“In the medium-term, the share of money in wealth must remain stable, equal to its optimal share. This means that total wealth increases in line with the money supply and that share prices rise in line with the money supply.”

“We see that the proportionality between the money supply, wealth and the stock market index implies in the United States, that equilibrium wealth is currently 21% higher than actual wealth and the equilibrium share price (S&P 500) is 3% higher than the actual share price and in the eurozone, that equilibrium wealth is currently 26% higher than actual wealth and the equilibrium share price (EuroStoxx) is 20% higher than the actual share price.”

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