Bernstein strategists expressed the view that U.S. stocks may not fully account for the possibility of interest rates remaining elevated for an extended period.
Even when excluding the seven largest tech companies, the market multiple remains 8% above the fair value, given a nominalyield of 4.75%, according to their analysis. An 8% premium suggests the S&P 500’s ‘fair value’ of around 3830. Earlier this year, the analysts said that they expect the returns from U.S. stocks to come down in the years ahead.
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