Amidst the run of non-stop record highs, here are today's:
GS are wary, this a summary of a note from head of global equity strategy Oppenheimer:
Despite posting unusually strong returns in 2019, the equity bull market continues; investors have largely shrugged off the potential economic and earnings hit from the coronavirus.
The relentless rise in equities is largely a function of lower bond yields and the hope that the current disruption to growth and supply chains proves short-lived.
However, the powerful rally in global equity market that started last year, as the Fed cut interest rates. has come during a backdrop of profit stagnation; consequently valuations have risen rapidly.
More:
Medium-term there are still secular supports for equity:
- 1. the still elevated ERP
- and 2. the lack of structural impediments to economic growth esp. in the US (strong household balance sheets).
But near term. the risk is that the impact of the coronavirus on earnings is being underestimated.
Coupled with high valuations this leaves equities vulnerable to a correction.
Equities be like:
