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Markets, economy and valuations: debate rages on
The strength of economic activity, and the market’s expectations of central bank policies and corporate earnings, have been driving asset prices. Valuations are excessive in some segments such as mega caps where profit margins are also high. But the key question is whether these high margins justify current valuations? And will these companies be able to grow their top line quickly, while maintaining margins in a context of increased global competition and exhausted consumers? On the other hand, judging the direction of the economy is becoming increasingly difficult.
