Investors expecting the stock market to bounce back after the Iran conflict may be disappointed. Several factors, including private-credit “cockroaches” and record valuations, could hold the U.S. market back.
The S&P 500 is pricey in 18 out of 20 valuation metrics, according to Bank of America’s research note. Five are at or near record highs. This rich valuation could make it difficult for investors to buy stocks without risking a significant loss. Meanwhile, private-equity firms may struggle to find undervalued opportunities due to the high demand and low supply.
If big investors decide to sell their stocks, it could force down prices further, exacerbating the market’s problems. The situation is complex, but experts warn that a post-Iran recovery might be delayed or even derailed by these factors.
Source: https://www.marketwatch.com/story/an-end-to-the-iran-conflict-should-rally-stocks-but-only-briefly-7d867ffd