No matter what, SocGen sees US equity performance over the next 10 years as modest at best.
They note that US equities face three headwinds: cyclically-adjusted
valuations (CAPE, starting date 1881) have returned to very expensive
territory, corporate margins stand at historically high levels, and
after already five years of growth from the 2009 trough, we estimate
that the probability of another recession kicking in is close to 100%
within the forecast timeframe (the longest cycle ever was 120 months,
or 10 years). While their central case is 'moderate growth and
inflation', they project a possible high growth surge to 4000 for the
S&P 500 and a deflation scenario which would put the S&P 500 at 500 (-12% per annum). (more)Please share this article
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