Core Insights - The International Monetary Fund (IMF) warns of increased risks of "disorderly market adjustments" due to rising trade policy uncertainty, expansion of non-bank financial institutions, and pressure on the bond market, compounded by severely overvalued asset prices [1][3] - The IMF emphasizes the need for central banks to remain vigilant regarding tariff and inflation risks, as market resilience is primarily driven by expectations of monetary easing in developed economies [1][3] Valuation Concerns - Valuation models indicate that risk asset prices are significantly above fundamental values, increasing the likelihood of disorderly adjustments during negative shocks [3] - The report highlights that stock and corporate credit valuations are "stretched," particularly driven by AI concept stocks, leading to historically high market concentration [3][5] Market Dynamics - The IMF notes a global phenomenon of "elevated asset valuations," with certain sectors and countries showing more pronounced overvaluation compared to the previous report in April [5] - The concentration of market performance in a few stocks raises concerns, as these stocks are driving overall market trends, warranting caution [7] - Although the IMF does not directly predict sudden severe adjustments, it acknowledges that higher valuations could lead to larger adjustment magnitudes if they occur [7]