Dear all

Markets have been on a tear for the past five months. Since my write-up published on 1 Nov 2020, citing opportunities in our Singapore market (click HERE for the write-up), STI has soared 786 points, or 32.4% from 2,424 on 30 Oct 2020 to close 3,210 on 5 Apr 2021 (intra-day high today was 3,212). At the time of writing this, S&P500 futures are trading at 4,040, translating to around 24% gain over the same period. In fact, STI is the 2nd best performing market for 1Q2021 amongst 18 global benchmarks.

Are markets in the midst of a bubble? Or aren’t they? Let’s take a look at the factors for and against this argument.

Factors against a bubble

It is common knowledge that a flood of money supply, ultra-low or zero interest rates, COVID-19 vaccine rollouts, US$1.9t stimulus spending and US$2 trillion infrastructure bill have sparked a