On December 3, Financial Association reported (Editor: Zhou Ziyi) that the overly hyped usa market is brewing an unprecedented bubble - Ruchir Sharma, chairman of Rockefeller International wealth management and financial consulting company, has raised this point in a recent article.

Sharma stated that despite the growing global geopolitical and macroeconomic concerns, international investors seem to have reached a consensus on one thing, which is to increase their shareholding in usa assets.

He pointed out, "Global investors are confident in the strength of the american financial market and its ability to continue to outperform all other economies, putting more funds into this country, which is unprecedented in modern history."

Rockefeller Capital Management was established in 2018 and is a leading independent private financial services firm. The company was originally founded in 1882 as the office of the John D. Rockefeller family and has now grown to provide strategic advice to ultra-high-net-worth and high-net-worth individuals and families, institutions, and businesses from its 29 offices across the usa. Rockefeller International is a division of the company that aims to expand its business footprint beyond the usa.

According to Sharma, usa stocks now account for nearly 70% of global major stock indices, far exceeding the approximately 30% level in the 1980s. Besides the optimistic earnings outlook for large usa companies, expectations for the elected president Donald Trump's boosting of the domestic economy are also very high, which has kept global investment in usa intact.

At the same time, based on certain indicators, the current exchange rate of the dollar has also reached its highest level in 50 years.

However, Sharma reminds investors that this mentality is "inflating" an unprecedented bubble and distorting the fundamentals of other economies.

Unprecedented.

During the internet bubble period in 2000, the valuation of the usa stock market exceeded current levels, but the premium relative to other parts of the world did not reach such exaggerated levels as it does now.

Indeed, to some extent, the strong performance of the usa market is warranted, as the usa's economic growth rate has indeed surpassed that of other developed economies. However, compared to markets in some developing countries, this premium is unreasonable, as developing countries often have higher economic growth rates than developed ones.

Sharma wrote, "Investors are talking about technology or ai bubbles, or focusing on investment strategies driven by growth and momentum, which obscure the roots of the bubbles in the usa market. The usa has become overheld, overvalued, and overhyped to an unprecedented extent."

Sharma also pointed out that these circumstances will ultimately lead the usa market towards recession, but at the same time, they have caused trouble for foreign economies.

"In the past, including the prosperous 1920s and the internet era, the rise of the usa market would boost other markets. However, now, the prosperous usa market is siphoning off funds from other countries... When funds leave smaller markets, the outflow of capital weakens (local) currency, forcing central banks to raise interest rates, slowing economic growth and making the fundamentals of the country appear worse."

Currently, the usa's attractiveness in the global bonds and private markets has also reached an unprecedented level.

As predictions about Trump's policies stimulated foreign demand for dollar-denominated usa treasury securities, the dollar has accelerated its rise since October. Sharma states that so far this year, overseas traders have invested $1 trillion in usa debt securities, nearly twice the capital flow in the eurozone.

Moreover, the usa has attracted over 70% of private investment inflow, with the private investment market size reaching 13 trillion dollars.

Worse still, with Trump's return to the White House, there is a growing trend where investors believe that Trump's proposed tariffs and low tax plans will further drive up the market. Sharma expressed concerns, "As with all bubbles, it's hard to know when this one will burst or what factors will trigger the market collapse."