'We are in a bubble, and it's going to burst,' says wealth manager Georg von Wyss

Financial market experts are sounding alarms about a potential bubble, citing the current "AI euphoria" and the recent SpaceX IPO as key indicators. Wealth manager Georg von Wyss warns, "We are in a bubble, and it's going to burst." This sentiment suggests that the current market highs may be unsustainable, driven by speculative excitement rather than fundamental economic strength.

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We are in a bubble, and it's going to burst.

Despite ongoing geopolitical instability, including the conflict in Iran, stock markets have surprisingly reached record levels. This resilience is attributed to several factors. "One reason is that economic growth is still very solid," explained Sybille Wyss. "Furthermore, corporate profits are rising significantly this year, which is a major driver for stock markets." Additionally, global liquidity has increased by ten percent in the past twelve months, injecting capital into the markets and creating favorable conditions for stocks.

Thomas Stucki acknowledges that geopolitical issues, such as the situation in the Strait of Hormuz, will inevitably cause economic disruptions. However, he notes that investors are looking past these short-term challenges, anticipating a resolution. "The financial markets are already speculating on an economic recovery," Stucki said. While an oil price of $80 per barrel is manageable for the economy, and supply chain issues are expected to be resolved, the markets appear optimistic.

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One reason is that economic growth is still very solid. Furthermore, corporate profits are rising significantly this year, which is a major driver for stock markets.

Daniela Grübel points out that the prolonged uncertainty in Iran and Ukraine is prompting governments to increase spending on infrastructure and defense, providing a stimulus for European markets. Georg von Wyss anticipates further volatility in energy and supply markets in the coming months due to the Iran conflict's impact on energy infrastructure. However, he believes the situation should normalize within two to three years, as economies adapt and alternative routes and capacities are developed, such as Saudi Arabia potentially increasing its oil production.

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The financial markets are already speculating on an economic recovery.