Global Markets on Edge as Valuation Concerns Mount Amid Geopolitical Turmoil and Policy Shifts

Market Valuation - The "Buffett Indicator," which compares the total value of the U.S. stock market to its GDP, has surpassed 200%, indicating significant overvaluation in the U.S. equities market, a level previously described by Warren Buffett as "playing with fire" [2][7] - Concerns have been raised by strategists regarding the S&P 500 being at dangerous levels due to this overvaluation [2] Geopolitical Tensions - Russia has conducted one of its largest aerial assaults on Ukraine, deploying over 600 drones and numerous missiles, resulting in significant damage and casualties [3][7] - In the Middle East, Iraq is investigating a crashed unidentified spy drone near its border with Iran, raising concerns about regional surveillance [3] - Denmark has banned civilian drone flights due to suspicious drone sightings near critical infrastructure, coinciding with a European summit [3] U.S. Policy and Trade Relations - Former President Trump is leveraging state power to support critical mineral companies, aiming to enhance domestic production and reduce reliance on foreign sources, particularly China [4] - The U.S. Commerce Secretary has urged India to open markets and improve trade relations, emphasizing the need for cooperation with the U.S. [4] European Political Landscape - German Chancellor Friedrich Merz's approval rating has dropped by 20 points in four months, with 65% of Germans expressing dissatisfaction with his leadership amid economic concerns [5][7] - The rising popularity of the far-right Alternative for Germany (AfD) party is contributing to the political challenges faced by the current administration [5] Market Updates - Major indices showed minor movements, with the DAX closing at 23747 (down 0.01%), DOW at 46267 (up 0.03%), NASDAQ at 24505 (up 0.02%), and FTSE at 9303 (up 0.02%) [6] - The HANG SENG index posted a 0.03% gain, reaching 26278, while the EUR/USD pair declined by 0.04% to 11695 [6] - Commodities had mixed performance, with GOLD rising by 0.22% to 3769 and US OIL falling by 0.15% to 6499 [6]