BofA Warns Stocks Price Perfection as Risk Premia Sink to 20-Year Lows

1 articles · Updated · Bloomberg · Jul 24

Sebastian Raedler said stock markets are priced for a scenario in which everything goes right, leaving investors poorly compensated for rising risks.
All-time-high expectations for profit margins and five-year forward earnings growth are colliding with risk premia at 20-year lows, the Bank of America strategist said in a Bloomberg Television interview.
That combination suggests investors are paying peak valuations while receiving unusually little cushion against disappointments, a warning that broad equity optimism may be overstretched.