Interesting, and worrying, to see warnings of a potential stock market bubble burst akin to Wall Street and 1929, as the FTSE 100 surges, driven by rises in oil process (almost $USD 55 per barrel) , to their highest levels since February 2021. The FTSE rose 229.61 points and 3.5%, taking it to within 800 points of pre-crisis levels and fuelling demand for shares in energy firms and banks. In London by the close of play, The HSBC had posted a gain of 10%, with Standard Chartered 9%, Barclays 8%. On Wall Street, The Dow Jones Industrial Index was up 500 points and S&P rose nearly 50 points.
Vaccinations, The Democrats and Biden’s presidential victory in The United States and the end of Trump’s era and the Democrats further consolidating their Congress and Senate ‘control’ (Joseph Manchin III allowing?!), with the resulting potentially very large US stimulus packages, have all boosted early 2021 confidence.
Against this optimism, there are the actual and potential impacts of UK and USA COVID-19 infection rates and questions surrounding the speed and size of potential President Biden tax agendas and big tech regulation, as well as economic and labour market slowdowns and UK lockdown.
Against this background, senior British commentators have pointed out the similarities and hallmarks of the mood to the run up to the 1929 Wall Street Crash, identifying the nature of the nature of the long bull market which since 2009 has matured into a potential bubble, with attributes such as overvaluation, price increases and somewhat excitable speculative investor behaviours. Worryingly, these commentators correctly identified the 2008 crisis.