Since the mid-20th century, modern financial literature has been trying to theorize stock market chance. The question of whether financial markets are rational is eminently complex. The theory of market efficiency, according to which asset prices reflect all available information, is opposed by behavioral finance, which maintains that human behavior can lead, through cognitive biases, to market anomalies. Although investors generally define themselves as rational in their management decisions (the opposite would be surprising), one can nevertheless wonder whether rationality consists in selecting an investment based on the estimation of its fundamental value or based on the anticipation of its stock price. In the latter case, momentum and the behavior of others are then essential, intrinsic value therefore matters little since the essential thing is to believe that others will be ready to pay more in the future... generally before the crash. Keynes, in the General Theory, already drew a parallel between the speculative behavior of financial markets, which can be compared to "a game of chemin de fer, old bachelor or musical chairs, an entertainment where the winner is the one who passes the hand neither too early nor too late, who gives the old bachelor to his neighbor before the end of the game or who gets a chair when the music stops".
This notion of a "rational bubble" therefore aims to explain movements that at first glance seem totally irrational: or how, three days before his inauguration, Donald Trump can launch a memecoin (followed by that of his wife) which reaches a capitalization of more than 70 billion dollars in a few hours, more than that of BNP! Beyond the value reached, which is totally mind-boggling, the question of conflict of interest naturally arises, with the American president holding 80% of the capital remaining to be issued. And to think that during his first term, the American president declared himself "not a fan" of cryptocurrencies because they could "facilitate illegal behavior." So we are well and truly in for another four years of American-style show. Donald Trump has already announced that he wants to act quickly and is thus ready to sign a hundred decrees today, the day of his inauguration, particularly on the immigration side.
Finally, on more down-to-earth considerations, after a start to the year shaken by rising rates, the financial markets have regained some optimism thanks to better-than-expected inflation figures for the underlying part, which are falling after three months of stagnation, while overall inflation has started to rise again due to less favorable base effects on energy. Basically, there is relatively little new: the majority of components of core inflation are contributing to the decline, proof that the disinflation movement is continuing even if the figures remain high in absolute value. This publication had the merit of stopping the rise (irrational, some would say?) in interest rates.
