Uncanny resemblance between today’s sharemarket and 1987

Original article by Karen Maley
The Australian Financial Review – Page: 31 : 2-Mar-18

Independent strategist Russell Napier says growth in M2 money supply in the US has fallen significantly in 2018, noting the parallels with US money supply in the year leading up to the sharemarket crash in October 1987. The rise in the yield on US 10-year bonds in 2018 has also mirrored the upward trend in 1987, albeit to a much lower level. At around 2.9 per cent, the bond yield is still well below the 1987 peak of 10.1 per cent, but Napier points out that the recent rise has been much larger in percentage terms.

CORPORATES
DOW JONES INDUSTRIAL AVERAGE INDEX, STANDARD AND POOR’S 500 INDEX, UNITED STATES. FEDERAL RESERVE BOARD, UNITED STATES. CONGRESSIONAL BUDGET OFFICE

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