Wall Street Stock Market Strategist Warns The Party’s Over
Sam Ro
BusinessInsider.com
Aug. 12, 2014
The S&P 500 is up an incredible 190% since its March 2009 lows. It’s up a whopping 50% since the beginning 2012.
In a new 34-page note titled “Transitioning To Lower Returns,” Barclays’ U.S. equity strategist Jonathan Glionna writes that those years of awesome returns are behind us for now.
“U.S. equities have made a remarkable advance in the past five years, recovering from the credit crisis, powering through the European sovereign debt scare, and surging on a third dose of quantitative easing, leaving the S&P 500 close to an all-time high,” he writes. “This advance was grounded in increased earnings, itself a byproduct of elevated profit margins; boosted by share repurchases, which are approaching new records; leveraged with more debt, which has never been higher; and augmented by an expansion of valuation multiples, with most now above historical averages.”
Indeed the rally we’ve experienced was well-justified. But those market drivers are losing steam.
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