The ASX 200’s strong run has been driven by sentiment and investors being willing to pay more for company earnings, rather than growing earnings themselves, which makes for fragile equity market conditions.
Until aggregate market earnings start growing – they’re forecast to fall for a third straight financial year in this year – the bears will say the ASX 200 should not be trading near record highs; there is an element of the world gone mad to the run.
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Anthony Macdonald is a Chanticleer columnist. He is a former Street Talk co-editor and has 10 years' experience as a business journalist and worked at PwC, auditing and advising financial services companies. Connect with Anthony on Twitter. Email Anthony at a.macdonald@afr.com
