That's according toco-founder Nicholas Colas, who highlighted in a Wednesday note bearish scenarios that could put a dent in the strong year-to-date rally.
"That [valuation] would be OK if [earnings] estimates were going up, as they were in 2020 and 2021, but they are not. In fact, the Street's S&P earnings estimates for 2024 made a new all-time low just last week," Colas said."Stocks are priced for near perfection in what will always be an imperfect and unpredictable world."1. Investors start to take profits
Colas warned a surprise drop in US labor markets and economic growth could be driven by the fact that monetary policy works with long and variable lags. And since the Fed hiked rates by more than 500 basis points over the past year, those lags could start to show up.