Market Overview

The 'Historical Unicorn Event' Investors Should Be Concerned With

The 'Historical Unicorn Event' Investors Should Be Concerned With

Investors don't appear to care that Deutsche Bank strategists think global stocks are not only at an "elevated" valuation, but "possibly the most elevated in aggregate through history."

As most major stock indices continue trading near their all-time highs, Boris Schlossberg, managing director of foreign exchange strategy at BK Asset Management, agrees that strategists and investors need to reassess their thinking.

Stocks and bonds are currently trading at a "gross overvaluation" and this is a major concern, Schlossberg said during a recent CNBC "Trading Nation" segment. Throughout history, it is common to find instances when either stocks or bonds are overvalued — but rarely, if ever, are both overvalued at the same time.

"It's almost like a historical unicorn event," he said.

It shouldn't be up for debate that this unusual situation is a direct result of quantitative easing by central banks across the world, Schlossberg said. For instance, when the Federal Reserve "opened its pocketbook" and started buying bonds, it resulted in a huge demand for bonds as a whole, which then spilled over into stocks because of easing monetary conditions.

"It seems almost inevitable that the tightening of monetary conditions and an unwinding of demand for all of these financial assets is going to create some sort of a sell-off in one or both markets," he said. "And that's why volatility, which has been tepid, could begin to rise as we move into the end of the year."

Related Link:

A Layman's Guide To The Beige Book

Posted-In: Boris Schlossberg CNBC Stock BubbleAnalyst Color Bonds Federal Reserve Markets Media Best of Benzinga


Related Articles (SPY)

View Comments and Join the Discussion!

Latest Ratings

TOLGoldman SachsInitiates Coverage On42.0
KBHGoldman SachsInitiates Coverage On36.0
YEXTSunTrust Robinson HumphreyMaintains28.0
LHCGSunTrust Robinson HumphreyMaintains160.0
DLRSunTrust Robinson HumphreyMaintains140.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at

Fed Leaves Interest Rates Intact; Market Puts Odds on December Hike

AMD Might Be Working With Tesla On An AI Chip