Optimists point to the private credit market, which many considered a bubble. After some excesses, the market returned to restraint, and this did not cause systemic disasters in the rest of the U. S. and.

Optimists point to the private credit market, which many considered a bubble. After some excesses, the market returned to restraint, and this did not cause systemic disasters in the rest of the U. S. and global economy.

Rarely have such stark differences been seen between central banks’ assessments and the market’s views on financial market trends. For at least a year now, central banks have been repeating almost in unison that valuations are excessive and unjustified by fundamentals. Market participants, at least so far, have turned a deaf ear and continued buying.

With January 2021 set at 100, the Nasdaq 100 now stands at 221 and the Standard & Poor’s 500 at 201. Europe has not performed badly either, but the gap with U. S. indices is substantial: over the same period, the Euro Stoxx 50 index rose by 78%.

The Bank for International Settlements (BIS), which is essentially the central bank for central banks, speaks of “. The most significant signals that have emerged so far point to competitive pressure and demand. For companies, the issue is not only volume growth: the quality of revenue, the resilience of the customer portfolio and the sustainability of the net margin in the next quarter also matter.

In the short term, the decisive lever remains commercial execution: market-entry timing, channels and market selection could determine the difference between expansion and margin compression. Investments by the five largest AI producers—Alphabet, Amazon, Meta, Microsoft and Oracle—are growing much faster than profits and cash flows. The point is that competition to secure a dominant position may push companies to commit excessive resources to projects whose returns remain uncertain: if the economic benefits of AI prove lower than expected, financing could suddenly decline, turning the investment boom into a prolonged period of contraction.

According to the BIS, the cycle is also being made more fragile by the conflict in Iran, which is fueling inflation and prompting markets to anticipate less expansionary monetary policies and higher inte. The ECB has struck a similar tone, recalling previous periods in which share prices and corporate debt reinforced each other. The most cautious, perhaps for understandable political reasons, is the U.

S. Federal Reserve, which nevertheless cites a survey of market participants who see AI as one of the most frequently mentioned risks for the next 12–18 months. The International Monetary Fund, by contrast, considers the risk to global financial stability limited, gFor companies, the issue is not only volume growth: the quality of revenue, the resilience of the customer portfolio and the sustainability of the net margin in the next quarter also matter.

The most significant signals that have emerged so far point to competitive pressure and demand. In the short term, the decisive lever remains commercial execution: market-entry timing, channels and market selection could determine the difference between expansion and margin compression.