Exact(3)
The greenback buys much more Big Mac south of the border than north of it.The Big Mac index suggests that currencies are particularly overvalued in Norway, Switzerland and Brazil (see chart).
Until recently China's recovery was driven largely by state spending but thanks to a rebound in construction, private-sector investment rose by 30% in the year to August, double its growth rate in December.But even if China's stockmarkets and housing markets do not look particularly overvalued now, there is a clear risk that they could become so.
At the same time, we do not view the market as particularly overvalued either.
Similar(57)
Investors are also worried that many stocks, particularly in technology, are overvalued.
The way he sees it, "the market is pricing in a rapid recovery in earnings," but even that recovery is not enough to offset the fact that many of yesteryear's market leaders, particularly in technology, are still overvalued.
Some stocks -- particularly those of technology companies -- may be overvalued, Mr. Siegel said, but investors who do not need their money anytime soon are better off not trying to make many distinctions.
The recent nervousness put the spotlight on whether some highly rated businesses - particularly in the technology sector - were now wildly overvalued, and many investors clearly decided the answer was yes.
While not particularly cheap, the typical U.S. stock does not seem obviously overvalued in light of expectations for profit growth, interest rates and inflation.
"We believe that the equity market correction has further to run and remain cautious in the near-term," said Graham Secker, analyst with Morgan Stanley, "particularly given that our models still show equities as being somewhat overvalued.
Consequently PPP comparisons are more reliable between countries with similar levels of income.So it is particularly interesting to see that on a burger basis the euro is still overvalued when compared with many other rich-world currencies.
Deutsche analysts reckon that the budget breakeven price for many governments is also above $73 and that Venezuela and Nigeria will struggle particularly; Russia's problems are well known (Barclays reckons the rouble is still 10% overvalued).
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