Risk of ‘hard’ stock-market valuation correction is growing, says Deutsche Bank — here’s why

[libertybele]

Risk of ‘hard’ stock-market valuation correction is growing, says Deutsche Bank — here’s why

Stock-market valuations are “historically extreme” by almost every measure. And while valuation corrections don’t necessarily result in market pullbacks, the risk of a “hard” correction is growing, warned a top Wall Street strategist.

“With the current cycle advancing very quickly, the risk that the correction is hard is growing,” wrote Binky Chadha, chief strategist at Deutsche Bank, in a Thursday note.

The warning comes as Wall Street firms have expressed nervousness as equities continue to rally, pushing major indexes to all-time highs, without any significant pullbacks. Including Friday, the S&P 500 has gone 214 trading days without a 5% pullback, rising more than 33% over that stretch. That’s the longest run without a pullback since a 404-day run that ended on Feb. 2, 2018, according to Dow Jones Market Data.....

https://www.marketwatch.com/story/risk-of-hard-stock-market-valuation-correction-is-growing-says-deutsche-bank-heres-why-11631292209?mod=home-page

[Free Vulcan]

They may be right.

I've seen the first genuine selling happening since the COVID plunge. The market looks heavy.

With our dollar printing Fed, who knows how long it will last, but with earnings coming in about 3 weeks the market may be nervous about earnings given all the negative economic data we've seen lately.

[catfish1957]

Not really a question of if, but one of when and how bad.

[libertybele]

They may be right.

I've seen the first genuine selling happening since the COVID plunge. The market looks heavy.

With our dollar printing Fed, who knows how long it will last, but with earnings coming in about 3 weeks the market may be nervous about earnings given all the negative economic data we've seen lately.

Hard correction? I agree, but how much of a hard correction is going to depend on a lot of things that the Biden administration does or world events;  amnesty, asylum to refugees, corporate tax hikes, foreign oil, attack on our own soil (major infrastructure is my hunch), infringing on State's rights, rioting, Tawain, ME, N. Korea, Iran, etc ., etc .  There isn't any positive news out there that I can see and with Biden's ratings and consumer confidence plummeting that doesn't exactly bode well for the market.

[Cyber Liberty]

10% (definition of a "correction) pullback on the DJIA is $3,500,

[Free Vulcan]

Hard correction? I agree, but how much of a hard correction is going to depend on a lot of things that the Biden administration does or world events;  amnesty, asylum to refugees, corporate tax hikes, foreign oil, attack on our own soil (major infrastructure is my hunch), infringing on State's rights, rioting, Tawain, ME, N. Korea, Iran, etc ., etc .  There isn't any positive news out there that I can see and with Biden's ratings and consumer confidence plummeting that doesn't exactly bode well for the market.

I don't know. The Fed is so deep into controlling the market that I'm afraid to predict it, even if that is what should happen.

And I agree. The markets tend to look 3 months to a year out, and right now alot of the news and data doesn't support the market continuing to go up.

[IsailedawayfromFR]

Not really a question of if, but one of when and how bad.

Yep.  The delay over the past year has been problematic as it will now only fall more.

Buckle up.