Source: Business Insider
A wave of corporate insolvencies has the best chance at dragging stocks from their lofty prices, Mohamed El-Erian, chief economic advisor at Allianz, said Monday. Investors have looked through US-China tensions, stretched valuations, stimulus delays, and surging COVID cases in recent weeks to push stocks higher. “You have a very strong technical supporting this marketplace,” El-Erian told CNBC , but large-scale bankruptcies could derail the rally. Even the Federal Reserve’s bond-buying and liquidity boosts can’t keep a slew of defaults from prompting unemployment and capital market damage, he added. Visit the Business Insider homepage for more stories . Corporate bankruptcies — more than any other factor — stand to halt the stock market’s steady run higher, Mohamed El-Erian, chief economic advisor at Allianz, said on Monday. Experts are beginning to wonder what, if anything, can topple the stock market’s extraordinary run-up. Investors have seen through oil-market chaos, spiking virus infection rates, US-China tensions, and stimulus delays, and major indexes currently sit just below record highs.