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A trader (c) on the completely new York Stock Exchange looks at stock rates 19 October 1987 as stocks were devastated during one of the most frantic days inside exchange’s history.
Stock markets could see sharp falls before the end of year as valuations have hit disproportionate levels, one strategist told CNBC’s “Squawk Box Europe” Thursday.
inside wake of the 2008 financial crisis, central banks around the planet have pumped trillions of dollars into the global economy to boost lending along with encourage growth. However, which massive market intervention has led to a sharp increase in stock prices — taking them to “epic bubble levels,” according to Paul Gambles, the managing director at Thailand-based advisory firm MBMG Group.
“We had a policy response to the global financial crisis (along with) at which point stocks were cheap along with they had an enormous tailwind behind them in terms of fiscal support,” he said. “which is actually quite a dangerous situation along with which is actually creating a bubble, along with which bubble has just got bigger along with bigger along with bigger … There isn’t any doubt right now (which) in valuation terms we’re in epic bubble proportions, probably the biggest bubble of all time.”
Gambles added which markets could be experiencing a moment similar to 2007, just before the historic market crash. “We right now think which there are conditions out there which are prime for which bubble to actually be pricked,” he added.
These conditions include unsynchronized global growth, tighter monetary policy along with “chaos” surrounding U.S. politics with the administration’s tougher stance on global trade, according to Gambles.
However, Gambles noted which there were a range of outcomes for markets which were “probably wider than which’s ever been at any time in history.” “We could have a Great stock market year, we could have a 20, 30, 40 percent plus correction,” he added.