After a banner year for the U.S. stock markets, many investors wonder how much further equities can rise in the year ahead.
“Valuations are high, higher than they’ve been 90% of the time over the past five years,” he told MarketWatch, pointing out that the S&P 500 is trading at 19.1 times trailing earnings. And while low interest rates from the Federal Reserve helps to justify higher stock prices, there are other factors that will cause equity valuations to fall.
While it is difficult to definitively prove that rising import tariffs and uncertainty over international trade policy is the cause of the slowdown, “I would argue that trade has been a key driver of the slowdown and that it’s hard to see the uncertainty going away,” he said.