Yardeni is not the only one predicting a stock market crash. According to CNBC, Jack Ablin of Cresset Capital expects US stock markets to crash more than 15% early next year. According to Ablin, “valuations are pretty stretched.”
To be sure, stock market valuations are not cheap. S&P 500’s forward PE multiple is higher than the five-year and ten-year average. However, next year’s earnings growth is expected to be higher than the ten-year average according to a FactSet report.
According to MarketWatch, Joe Davis of Vanguard sees a 50% chance of a market correction next year. Typically, a market fall of 10% is just a correction. Also, Guggenheim Partners’ Scott Minerd is amongst those who feel that asset prices have run ahead of fundamentals.
Minerd said, “while the Fed has prolonged the expansion, the reality is that it is also the start of silly season in risk assets. By heeding the lessons of the past, we continue to position defensively so that we can preserve capital and be prepared to take advantage of opportunities when asset prices inevitably reset.”
View more information: https://marketrealist.com/2019/12/is-us-stock-markets-crash-coming-2020/