Global week ahead: Bull markets, bubbles and 'Swiftonomics'

"It was the champion of times, it was the worst of times, it was the property of wisdom, it was the property of foolishness," Charles Dickens famously wrote. That aptly captures the dislocation betwixt governmental events and marketplace enactment arsenic we spell into the adjacent week.

The U.S. authorities shutdown has stoked worries astir its adverse interaction globally, but it does not look to person dampened the risk-on sentiment crossed large equity markets. The governmental deadlock successful Washington, D.C. looks acceptable to proceed into adjacent week, with concerns the Trump medication could use the backing frost to permanently slash roles and cancel definite projects.

While determination has been overmuch probe connected what an extended shutdown could mean for stocks, large U.S. and European indexes person been notching grounds highs. That comes arsenic money flows information from the Bank of America shows $26 cardinal moved into planetary equities during the week ended Oct. 1, with a grounds $9.3 cardinal going into the exertion sector.

Fresh Record Highs

Saxo's informing is "don't predict, prepare." In a caller note, the slope said "the temper could hardly beryllium much conflicted. Equity indices hover adjacent grounds highs ... yet user sentiment remains adjacent to historical lows," encouraging investors to diversify to support against instability.

There are reddish flags successful the recognition markets successful particular. Barnaby Martin from Bank of America told "Squawk Box Europe" their caller survey showed recognition investors person 1 of the "biggest overweights ever successful the 20-year history" of that survey, informing determination were expanding concerns astir marketplace bubbles.

Last week, U.S. car parts shaper First Brands filed for bankruptcy aft revealing a $12 cardinal indebtedness heap done the usage of off-balance expanse financing. Famed short-seller Jim Chanos told the Financial Times helium "suspects we are going to spot much of these things," informing the progressively expansive backstage recognition marketplace has echoes of the subprime crisis.

A bubble that does not look astatine hazard of bursting is the 1 formed astir multi-award-winning popular prima Taylor Swift. Her latest medium "The Life of a Showgirl" was released worldwide connected Friday pursuing months of anticipation for fans. It follows her record-breaking Eras Tour that topped $2 cardinal successful summons income alone.