Famed market bear Albert Edwards warns of an ‘everything bubble’ in US stocks and home prices that could soon pop

• Albert Edwards warns of the potential American stock and housing bubble.

• He said that the high interest rates and Japanese financial concerns can lead to market corrections.

• Edwards publishes his observations under the presentation of Société Générale.

Albert Edwards warns of Société générale from Société générale, famous for calling the Dot-Kum bubble that preceded the crash in 2000, investors of the painful decline.

In his last memoirs of customers this week, Edwards said that American stocks and home prices are in “the bubble of everything” believed to have appeared soon.

Equipment assessments are highly slope. The rate of prices to the modified profits that were modified in the waterfall is located in 38 years, and it is one of its highest levels ever, and both late and important PE ratios for 12 months of S&P 500 are historically high.

To Edwards, this does not sit well with the fact that long -term interest rates have risen. The high percentage of government bonds tends to influence the stock market evaluations where investors can find attractive returns without a high level of risk in the stock market.

However, American stocks have witnessed a strong gathering in recent years, with 78 % since its lowest level in October 2022. High market evaluations remained in the future estimated in the low market. When stocks are pricelessly valuable, you can expect higher future returns, and vice versa.

Edwards wrote: “It is worth noting how the stock market in the United States managed to maintain high reviews of the nose despite the longer returns of bonds that rise,” Edwards wrote. “I don’t expect to be able to ignore it for a longer period.”

In housing, Edwards said that the rate of income in the United States was almost flat over the past few years after the epidemic, while the percentage decreased in countries such as the United Kingdom and France.

“The United States is the only market where the price rates of the home/income are no Removing the classification since 2022 and bond revenues have increased. Is the American housing market also exceptional for Europe? No, it’s nonsense, and in time, investors will come to claim that they know this all the time, ”Edwards wrote.

For what could cause potential bubbles in American stocks and home prices, Edwards said to watch Japan.

“In the wake of the ruling party’s coalition loses its highest majority, fears in the bond market about the risks of more financial mitigation and high inflation are increasing,” he wrote.

High inflation in Japan may mean high interest rates and increase relaxation in the Japanese yen that carries trade, as foreign investors borrowed cheaply in the yen and converting them into dollars to buy high -yield American assets. In 2024, the Bank of Japan raised the prices unexpectedly, as investors liquidated the assets they bought with the borrowed yen.