Report
US: the two sides of the wealth effect
US households have never invested so much in the equity markets. This asset class represents 42% of their financial assets. At the peak of the dotcom bubble, it was only 32%. It's a two-sided coin. On the one hand, the rise in equity markets creates a strong wealth effect and, as such, can help to support household consumption - at least for some spending at the top end of the wealth distribution. On the other hand, there is a vulnerability, given the high level of valuations and the concentration of gains on a few stocks associated with the AI boom. In the event of a correction, the negative shock to total wealth will be accentuated.
Provider
Oddo BHF
Oddo Securities provides securities brokerage and research services. The company offers equity, economic, and derivatives research and credit analysis services. It focuses on insurance, automotive, building materials, pharmaceuticals, telecommunications, information technology, and agri-food industries.
Bruno Cavalier
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