Brace for overvalued US stocks to crash again, Morgan Stanley warns

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Brace for US stocks to crash again – their extreme valuations echo the 2022 bear market, Morgan Stanley strategists warn

Get ready for US stocks to crash again, because they're looking overvalued — just like they did at the start of the bear market last year, Morgan Stanley strategists have warned.

In their note to clients, the strategists said their analysis showed US stock prices at levels similar to those reached just before 2022's brutal slump kicked off, pulling the, as investors grew hopeful the Fed would hold off from more interest-rate hikes. The central bank raised rates from near zero to around 4.5% in the past year as it tried to cool high rates of inflation.

They warned those levels show a disregard for the potential threats of rising interest rates or an economic downturn. Investors are concerned the Fed's determination to bring down inflation could end up harming the US economy. The key P/E metric allows investors to analyze the trading price of a stock and compare it with others, to help decide how much it reflects the stock's true value. It's a measure of the price in relation to its earnings per share.

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DOW -575 points because the Fed are going to do exactly what everybody thought ( and they said they were ) going to do. Negative in 2023 = self harm on a ridiculous level. Rates will settle somewhere in 5% to 6% range barely higher by y.e. !

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