Leon Cooperman, the billionaire investor, warns against an overly optimistic assessment of the US stock market, particularly the S&P 500. He holds the view that the index, despite its record levels above 6,000 points, is currently valued at a historically high price-to-earnings ratio of about 23 times expected corporate earnings.
A Conservative Outlook
Cooperman expects a challenging economic environment for the USA. Factors such as weak growth and persistently high inflation are driven by trade tariffs and geopolitical conflicts that could disrupt supply chains and lead to price increases. Therefore, he advocates for selectively choosing undervalued individual stocks rather than betting on the entire market.
The Optimistic Perspective
In contrast, Ed Yardeni, a well-known market strategist, has an optimistic outlook. Yardeni sees further upside potential in the US stock market and believes that new records are possible. This positive forecast is particularly relevant for European investors who could benefit from the growth potential in the USA.
In summary, two different perspectives face off: Cooperman warns of caution in view of global uncertainties and high valuations in the S&P 500, while Yardeni sees opportunities for further price increases and new all-time highs.