“The fear of missing out or greed is playing a role in the current market and that is not a good sign,” Andrew Harmstone, head of global balanced risk control strategy at Morgan Stanley Investment Management told CNBC’s “Street Signs Asia”.
Both the S&P 500 and Dow Jones Industrial Average posted their biggest monthly performances since January 1987 despite record coronavirus-led deterioration in the US labor market. The surge seems to have been fueled by optimism that both the economic growth and markets will witness a V-shaped recovery.
“Harmstone argued that the gains came as investors denied the damage that’s actually been occurring to the global economy, according to CNBC.
“People still think that things are going to go back to normal, or what they were recently, quite quickly,” said Harmstone, adding further that the real extent of that damage will become “visible” in the next phase, beginning with “actual bankruptcies” or at least downgrades of companies.
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