Investors should be cautious as valuations in the U.S. stock market have climbed back to levels as “extreme” as those seen in 2022 around the start of the bear market, according to a note Monday from Morgan Stanley Wealth Management.
The expansion of the U.S. equity market’s price-to-earnings multiples appears “premature,” as they’ve “returned to the highs reached when the current bear market began,” Morgan Stanley Wealth Management’s global investment committee, led by Lisa Shalett, said in the note. The chart shows valuations for FAAMG stocks peaked in the late summer of 2022, while those for the S&P 500, when stripping out those stocks, are back around levels seen in June. That’s the month the S&P 500 confirmed a bear market.
Its bizarre how market is working against the Fed.