Investment Updates
Is A Stock Bubble Bursting?
Published Friday, September 4, 2020, 9:15 PM EST
(Friday, September 4, 2020, 9:15 PM EST) Is a stock bubble bursting?
No, the market plunge does not appear to be a bubble bursting. Here's why.
Consumer sentiment is still ailing. At 74.1, consumer sentiment is still in the dumps. It's way off the average rate shown in the dotted line. Its weak condition belies the notion that last week's market downward volatility was a bubble about to burst. To float a price bubble in stock prices, irrational exuberance must be widespread. The 74.1 reading in the consumer confidence poll, conducted monthly by the University of Michigan for decades, is nothing like the 112-plus sentiment readings that characterized the tech bubble of 2000.
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