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According to asset manager ODDO BHF Asset Management, there could soon be a correction on the stock markets if inflation should pick up sharply in the near future as expected. “Next inflation figures are going to be much higher than the previous ones due to base effects and a transitory distortion between offer and demand“, says Laurent Denize, Chief Investment Officer at ODDO BHF AM. The currently ongoing equity rally is entering a delicate phase.
“A pertinent question for stocks from a valuation standpoint is whether profit growth expectations can continue to increase enough to offset the rise in the discount factor linked to the rise of long-term interest rates”. The discount rate describes an interest rate used to convert future payments, such as a company's cash...
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