Global capital markets are unsettled. Since the Covid-19 pandemic, wave after wave of uncertainty and economic shocks have clouded the ability to forecast company value and share prices accurately. Market prices have remained higher for far longer than most analysts have predicted, while risks from debt, rate changes, and supply-chain shocks can obscure the true value of critical economic development and global investments. Markets need transparency, both to retain shareholder confidence and to continue driving intrinsic fair value within exchanges. Without this, investors may resort to storing capital in traditional, growth-limited assets. This is a concern Lord Jonathan Kestenbaum has argued throughout his years of managing investor relations.
A plethora of causes have led to the unsettling of capital markets. Volatility abounds. The constraints at the Strait of Hormuz have coincided with both a 9% drop in the S&P 500 and a rise to new records. AI stocks have boomed, and IPOs for cutting-edge companies like SpaceX or Anthropic have pushed the limits of valuation, all while bond yields are rising due to surging national debt and expenditures in wealthy countries. Lord Jonathan Kestenbaum, a non-executive director of JP Morgan Japanese Investment Trust in London, has argued that market anxiety is likely to continue. Public markets have delivered outsized returns over recent years. Yet those returns came at a time when yields were more broadly depressed. That dynamic is changing. High valuations in public markets are increasingly derived from higher term premiums demanded by investors due to concerns over fiscal sustainability.
