Record Hunt of Stock Markets: Fed Rate Cut as Catalyst

The stock markets recorded impressive highs last week after the U.S. Federal Reserve announced its first interest rate cut of the year. This measure has boosted sentiment, which some analysts describe as a short-term "honeymoon rally." The more relaxed financial environment and the boom in artificial intelligence are contributing to the positive development of stocks, defying the usual weak September trend. Strategists like Michael Hartnett from Bank of America doubt the imminent end of a potential stock boom and draw parallels to historical stock bubbles that often saw significant gains. Jeff Krumpelman from Mariner Wealth Advisors considers the currently high valuations to be justified due to AI-driven productivity gains. Despite the positive outlook, he warns of a possible overheating of the markets, which could lead to a speculative bubble. Other experts, such as Ed Yardeni, also express concerns that the loose monetary policy could lead to an unstable stock rally not supported by fundamental economic data. Emily Roland from John Hancock Investment Management describes the current environment as favorable but fragile. There is a risk that markets are focusing exclusively on the positive effects of the rate cut. A number of prominent financial institutions such as Wells Fargo, Barclays, and Deutsche Bank have raised their forecasts for the S&P 500, also supporting the momentum of the AI investment cycle and the Fed's monetary easing. At the same time, risks remain. Strategist Bill Smead sees parallels to previous market highs and warns of a potential burst of the speculative bubble amid AI enthusiasm. Excess that is not based on solid economic foundations could have long-term consequences.