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Since the Lehman bankruptcy, the stock market has not discriminated between companies and sectors, and has been steered by risk aversion

- "Since the Lehman bankruptcy, all stock market prices (companies and sectors; we will look at the situation of the CAC and the Eurostoxx) have moved in lockstep. Discrimination between companies and between sectors has been significantly reduced; the stock market as a whole has fluctuated in line with risk aversion, which has become the dominant explanatory factor of the share prices of all companies, whatever their specific situations (trends in results, turnover, etc.). This has obviously generated very significant valuation anomalies (dispersion of PERs), and a need to forecast risk aversion in order to forecast stock market prices."



Natixis Flash Economics 462 20100915

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