Another look at the valuation of the US stock market

Although the valuation of the US stock market is now approaching its peak during the dot com bubble, we doubt that it will reach such giddy heights. This reflects our forecast for a renewed rise in long-dated TIPS yields and judgement that US corporate credit spreads no longer have much room to fall.
John Higgins Chief Markets Economist
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Asset Allocation Update

Is US households’ cult of equity a bad omen for stocks?

The record allocation of US households (and non-profit organisations) to equites chimes with the broader evidence that the valuation of the US stock market is high by historical standards. With that in mind, while we are not forecasting a crash any time soon, we do anticipate that returns over the next decade will be substantially lower than they have been over the last one.

11 June 2021

Asset Allocation Chart Book

Prospects for risky assets no longer seem as bright

We are still anticipating an extremely rapid recovery in the global economy over the rest of this year. But even so, it has become more difficult to make the case that returns from risky assets across the board will remain very strong, at least in the near term.

10 June 2021

Asset Allocation Update

Outlook for Treasuries still a threat to US equities

Today’s US Employment Report has failed to awaken the Treasury market from its slumber this quarter. We think, however, that long-dated yields will rise again in due course after their surge earlier in 2021.

4 June 2021

More from John Higgins

Asset Allocation Chart Book

Prospects for risky assets no longer seem as bright

We are still anticipating an extremely rapid recovery in the global economy over the rest of this year. But even so, it has become more difficult to make the case that returns from risky assets across the board will remain very strong, at least in the near term.

10 June 2021

Capital Daily

Taking stock of US inflation expectations and Treasuries

The recent pull-back in the 10-year Treasury yield mainly seems to reflect less concern about the long-term outlook for inflation, even though Thursday’s CPI data will probably show that core inflation rose last month to a 28-year high.

8 June 2021

Asset Allocation Update

Outlook for Treasuries still a threat to US equities

Today’s US Employment Report has failed to awaken the Treasury market from its slumber this quarter. We think, however, that long-dated yields will rise again in due course after their surge earlier in 2021.

4 June 2021
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