U.S. stocks are becoming relatively expensive. That’s according to Russ Koesterich of BlackRock, who advises investors on stock valuations and what kind of returns to expect in the near future. While many investors take a break from concerns about the markets in the summer, Liz Ann Sonders cautions us to pay attention. The chief investment officer for Schwab highlights the market’s current risks and potential for volatility. Although the saying, “The stock market is not the economy” is true on a day-to-day basis, the two do tend to move together. Urban Carmel charts economic trends to forecast the risk of recession and corresponding market returns through 2018.
Into Thin Air– Despite growing political risk and high valuations, the stock market—like the Energizer Bunny—keeps going and going, grinding upward. Russ Koesterich of BlackRock says, “I believe that markets can still move higher, and there are good reasons for the ongoing rally—namely, strengthening global growth, and stronger widespread earnings. Still, most traditional valuation ratios indicate that stocks are expensive (particularly in the U.S.) and future returns are likely to be muted.” Read more…
Smooth Sailing for Stocks?- Stocks have been drifting along near record highs and background conditions remain relatively positive in the near term. But seasonal tendencies remain a risk and volatility has picked up a bit, so investors should be on alert for a summer pullback. Liz Ann Sonders and her team at Schwab offer analysis. Read more…
Recession Risk Remains Low– Urban Carmel believes that, “The major macro data so far suggest positive, but slow, growth. On balance, the evidence suggests the imminent onset of a recession is unlikely. With valuations now well above average, the current pace of growth is likely to be the limiting factor for equity appreciation.” Read more…
John R. Day, Bill Ennis, Stephanie Davidson and Matt Heller
Disclosure – The articles mentioned in Mid Week with Day & Ennis are for information and educational purposes only. They represent a sample of the numerous articles that the firm reads each week to stay current on financial and economic topics. The articles are linked to websites separate from the Day & Ennis website. The opinions expressed in these articles are the opinions of the author and not Day & Ennis. This is not an offer to buy or sell any security. Day & Ennis is under no obligation to update any of the information in these articles. We cannot attest to the accuracy of the data in the articles.
