When we look at our valuation data on stocks, which is based entirely on our bottom-up views of each company we cover, not much has changed: The market is still reasonably close to fair value, the United States is still the most overvalued market, and we still see the cheapest valuations in the energy and basic materials sectors.
However, a look at the global macroeconomic picture and the bond market reveals some potentially deep shifts under the surface. Japan, a market darling just a quarter ago, has plummeted. Treasury volatility has spiked, and Treasuries themselves have seen a meaningful increase in yield (albeit off a very low base). And the economic picture seems to be worsening on the margin, with purchasing manager surveys declining to below 50 in many markets.
Click to read more from Heather Brilliant's Outlook for the Stock Market ...
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