LONDON – Standard Chartered’s chief executive on Thursday warned that the stock market’s valuation had reached an inadvisable level during a period he described as “speculative hype”, saying it was possible for tech-led sell-offs to enter others. Fields.
Bill Charters, CEO of Standard Chartered, told CNBC, “There are indications that the broader stock market is troubling, even though the various valuation multiples (it) indicate that the markets are definitely (in) some aspect, it’s a PPP.” “Squawk Europe x Europe” on Thursday.
“It doesn’t apply to banks, I’ll add very quickly. I would say that value stocks generally don’t seem to have full value at the moment. But it’s the nature of the speculative hype that we currently have.” Added.
His comments came after US futures contracts with the Dow Jones Industrial Average closed at a record high on Wednesday, and Federal Reserve Chairman Jerome Powell denied the risk of inflation.
Powell said it could take more than three years for prices to reach the US central bank’s inflation targets. It was another indication that the Fed plans to look ahead to any short-term surge in inflation and that interest rates are likely to remain stable for some time to come.
Amid sharp rise in bond yields, fears of inflation have increased in recent weeks as policymakers discuss a second round of economic relief during the ongoing coronavirus crisis.
Winter, however, said it was not worried about inflation in the short term. The CEO of Stanchart said the combination of ongoing “very appropriate” monetary policy and “very significant” monetary momentum, particularly in the U.S. In, may lead to temporary measures of inflation.
“But, that would probably require some other shock to translate into real market volatility,” he added.
When asked if high-tech stocks could affect broader markets if they suddenly fell, Winters replied: “It’s possible. We all remember the dotcom bubble very well and when the bubble bursts, it’s definitely technology.” Will hit the field, dotcom, very hard. “
“But it flooded the broader economy and some would say it also led to a fairly mild recession – a severe recession, even though it felt very sharp at the time.”
“I think there’s still a very active debate about what value some of these have for tech stocks or tech giants. To keep the market value higher, who’s to say they weren’t judiciously underestimated at the top of the dotcom bubble and not the other way around? ”Winter said.
On Thursday, Stanchart reported a 57% decline in annual profits for 2020, missing analyst expectations.
The London-based lender said pre-tax profits stood at 2019 2019.61 billion, compared to 71 71.711 billion in 2001 and an average of બેંક 1.8585 billion, according to analysts’ estimates compiled by the bank.
Stanchart also re-established its dividend and reaffirmed its long-term profit targets.