Contrarian Investor: Equity bulls beware - a market correction may be looming

Nearing end of stockmarket cycle

clock • 3 min read

Talk to equity bulls and even they will admit we must be somewhere near the fag-end of the current stockmarket cycle. The current upswing has lasted a long time, although growth has been more muted than expected.

Given this uncertainty, it is best to discount the worst, in which case the equity bulls are in trouble. I would argue the business cycle is looking threatening for equities. Valuations are also a tad optimistic and no-one could argue US equities represent 'fair value'. High P/E ratios might just be justified if earnings were roaring ahead - but the brutal truth is they are not. Earnings season We now have numbers for two-thirds of businesses due to publish their Q1 2016 earnings in Europe, and 90% in the US. Over in America, the best that can be said is that companies have mainly r...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on US

JPMAM's Katie Magee: US equities provide a lesson in long-term thinking

JPMAM's Katie Magee: US equities provide a lesson in long-term thinking

Test of investor resolve

Katie Magee
clock 04 July 2025 • 3 min read
Investors warn American exceptionalism 'not dead but diminishing'
US

Investors warn American exceptionalism 'not dead but diminishing'

Despite rallying stock markets

Sorin Dojan
clock 04 July 2025 • 4 min read
US beats expectations with 147,000 jobs added in June
US

US beats expectations with 147,000 jobs added in June

Slim chances for Fed rate cut

Patrick Brusnahan
clock 03 July 2025 • 2 min read
Trustpilot