US Stocks Are No Bargain Even After Pullback
While inflation and recession are less of a risk, US equities rely on an ever-expanding economy to keep rallying
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The cost of compensating for the risk of owning US stocks has surged since fears over the war on Iran and disruption by artificial intelligence gripped investors. While that has helped the market pull back from last year’s record highs, it’s still not cheap.
US equities are by no means undervalued. A free-float weighted index of global equities excluding the US trades at 18 times earnings. The S&P 500 trades at over 24 times. That’s at the upper end of the range US stocks have traded in the period since the Great Financial Crisis ended in March 2009.