A bout of global stock-market turmoil and an outbreak of UK street violence as adjacent news items gave an apocalyptic feel to the start of the week. But as rioting continued, markets appeared to steady, led by Tokyo with a 10 per cent Tuesday rebound. We know the ugly sentiments that animate the thugs – but do we understand the sudden nerviness of investors?
Once media clamour about 1,000-point falls subsided, two strands emerged, both American. First, fear – driven by bad employment figures – that the US economy is weaker than previously thought, fuelling a conviction that the Federal Reserve should have cut interest rates at its late-July meeting rather than waiting for the next in mid-September.
Secondly – and here let me quote the catchphrase of that wily 1950s schoolboy Nigel Molesworth, ‘any fule kno…’ – a belated inkling that US tech stocks to which so much AI-related hype has been attached had become wildly overpriced.
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