Stocks priciest in 20 years vs. bonds, expect 'weak returns' for years

US stocks enjoyed a surprisingly buoyant first half, defying recession warnings, as investors took heart from the prospect that the Federal Reserve may be close to ending its interest-rate increases. The hype over AI also proved a strong support for the market, fueling massive gains in mega-cap tech names.

However, a growing chorus of experts are now pointing out that equity valuations are now looking increasingly stretched, raising the risk of a correction. US stocks are the most expensive in 20 years relative to bonds by one measure, according to one market strategist. The 12-month earnings yield on US stocks, minus the 10-year government bond yield, is just 1.1%, compared with 5.7% in Europe and 5.2% in the UK, Pictet Asset Management chief strategist Luca Paolini showed in a tweet, using Refinitiv data. That shows equities are overpriced and could hinder future returns.

"After recent rally, US #equities are the most expensive vs #bonds in 20 years. And the #economic outlook also suggests v weak returns in coming years," he said in the tweet.The price/earnings to growth ratio for US stocks - another key equity valuation metric that factors in longer-term future earnings -

United States United States Latest News, United States United States Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Why U.S. stocks and bonds stumbled on talk of a Bank of Japan policy tweakThe Dow snaps a historic win streak and Treasury yields surge Thursday after a news report says Bank of Japan policy makers will discuss a crucial policy tweak.
Source: MarketWatch - 🏆 3. / 97 Read more »

These 11 funds have performed as well as tech stocks over the past 5 yearsMorningstar data reveals the funds outside of tech and growth sectors that have outperformed over the last five years.
Source: CNBC - 🏆 12. / 72 Read more »

Stock market news today: Stocks mixed as Fed begins 2-day meetingUS stocks trade mixed as the Fed begins its 2-day policy meeting
Source: BusinessInsider - 🏆 729. / 51 Read more »

Europe stocks set for mixed open on Fed decision day; earnings roll inEuropean stocks are set for a mixed open as markets brace for the latest monetary policy update from the U.S. Federal Reserve.
Source: CNBC - 🏆 12. / 72 Read more »

Asian stocks dip before the Fed, Australia rallies on soft inflation By Investing.com⚠️BREAKING: *ASIAN STOCKS END MIXED ACROSS THE REGION AHEAD OF FED RATE DECISION; CHINA SHARES SLUMP 🇯🇵🇦🇺🇨🇳🇭🇰🇰🇷🇮🇩🇮🇳
Source: Investingcom - 🏆 450. / 53 Read more »