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Photo illustration: Sarah Grillo/Axios. Photo: Olivier Douliery/AFP via Getty Images

Stock indexes around the globe have been roaring higher since the start of the year, but expectations of improved economic growth and soothed international tensions may be getting a bit ahead of themselves.

Driving the news: The IMF released its latest World Economic Outlook Monday, showing yet another revision lower of its expectations for global growth in 2019 and 2020. IMF head Kristalina Georgieva also issued a number of warnings, suggesting that the worst may not have passed yet.

  • "If I were to mark the words that come to my mind at the start of this decade it would be increased uncertainty," she said on Friday during a speech at the Peterson Institute for International Economics. "And we know that uncertainty is not a friend to investment, growth and jobs."

Why it matters: Economists and market watchers worry that if trade and the manufacturing sector do not improve soon, the health of the global economy could be at risk.

  • While the IMF said "tentative signs that manufacturing activity and global trade are bottoming out" have helped boost market sentiment, they also noted that "few signs of turning points are yet visible in global macroeconomic data."

Yes, but: Georgieva told Axios following her speech that she understands why stock investors have gotten especially bullish lately, even in light of the IMF's worsening assessment of global growth.

  • Sure, "90% of the world’s economy by GDP has slowed down simultaneously, but it doesn’t mean there is no growth," she said. "For the next year and year to follow we are a bit more optimistic."

Watch this space: Pessimism and worry were the big themes during last year's impressive run for global equities, but that feeling reversed itself in the fourth quarter of 2019 and a number of metrics are starting to show that traders now have become overly exuberant.

  • Ned Davis Research warned on Friday that its sentiment index had reached “excessive optimism” territory. Earlier this month its analysts released a note saying the S&P 500's profits-to-earnings ratio was "well above fair value."
  • Renaissance Macro Research said its metrics show bullish sentiment has reached "the uncomfortable stage,” nearing levels last seen ahead of January 2018's "Volmageddon" selloff.
  • CNN Business' Fear & Greed index has risen to 89, indicating “extreme greed.”

Georgieva also signaled some worry over the overly complex nature of financial markets, particularly in the U.S. and other industrial countries like Japan and Western Europe, in her remarks on Friday.

  • "There is a point at which financial deepening is associated with exacerbated inequality and less inclusive growth," she said.

What it means: Deepening financial markets have long been considered beneficial for a country's growth and development, but Georgieva argued that research is beginning to show that there is a point at which financial depth becomes negative.

  • "The more sophisticated your financial system is … the less accessible it would be for less sophisticated people and firms, and then inevitably it would mean some degree of exclusion."

The intrigue: The 2020 Edelman trust barometer, released Monday, shows data may be starting to show the stress from overly deep financial markets in industrial countries.

  • Throughout the life of its survey, Edelman has found that the more economic growth a country has, the higher the trust in its institutions.
  • While that connection has held up in developing countries in the Middle East and Asia, it is now decoupling in industrial countries with deep and complex financial markets.

What they're saying: "[N]ational income inequality is now the more important factor in institutional trust," CEO Richard Edelman said in a release accompanying the results.

  • "Fears are stifling hope, as long-held assumptions about hard work leading to upward mobility are now invalid.”

The bottom line: Deutsche Bank investment strategist Parag Thatte points out, "Equity positioning, like the market itself, has run far ahead of current growth as investors price in a global growth rebound."

Go deeper: IMF chief applauds "bravery" of Trump tax cut

Go deeper

G20 coal impasse previews fraught UN climate summit

A man tends to vegetables in a field as emissions rise from nearby cooling towers of a coal-fired power station in Tongling, Anhui province, China, Jan. 16, 2019. (Qilai Shen/Bloomberg via Getty Images)

G20 environment ministers ended talks without agreeing to phase out domestic coal-fired power generation and funding for such plants abroad, a deadlock that foreshadows difficult negotiations looming for this fall's critical climate summit.

Driving the news: Officials who met in Naples, Italy, on Thursday and Friday could not find consensus language on the use and financing of the most carbon-emitting fuel.

Updated 2 hours ago - World

At least 125 dead in western India after landslides, monsoon flooding

Vehicles driving through a flooded street in Mumbai on July 19. Photo: Pratik Chorge/Hindustan Times via Getty Images

At least 125 people are dead after monsoon rains triggered landslides in the western Indian state of Maharashtra, authorities said on Saturday, according to Reuters.

State of play: Downpours lasting several days have impacted hundreds of thousands of people, as major rivers are in danger of breaking through their banks.

Updated 3 hours ago - Sports

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🚨: China wins 1st gold of Tokyo Olympics

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👻: How the no-spectator Olympics could affect the athletes

🇺🇸: "What an honor it is to watch you soar," first lady tells U.S. Olympians

🥇: The six new sports at Tokyo 2020

💉 About 100 U.S. Olympic athletes are unvaccinated

Go deeper: Full Axios coverage