Always easy to explain after, but it is clear that we can now explain the good growth of the stock markets by the massive support coming both from the US (50 bp decrease for interest rates) and China (monetary policy, but also fiscal support now expected). Probably difficult to expect a recession in the short term (except from exceptional events) given the massive monetary and fiscal supports from the 2 major economies. The main risk is probably the return of inflation in the US, given the high level of support for the economy. Not a major risk for China, which is more and more following the path of the long deflation that Japan has experienced from 1990.
My favourite valuation metrics (CAPE ratio) has now rebounded by 28 % since May 23. It is at an historical very high level : 36.84 vs a median level of 16 on a very long period. It could continue to increase in the short term and get closer to the record high of 44 in Dec 99.
