The American exceptionalism trade is under pressure as valuation premium for U.S. stocks shrinks

The key development is a rapid contraction of the valuation premium enjoyed by U.S. stocks that began last fall and has accelerated since. Short-term volatile swings tied to the Iran war have masked this broader, market-wide compression in equity multiples, implying a more cautious outlook for U.S. equity valuations.

Analysis

The key development is a rapid contraction of the valuation premium enjoyed by U.S. stocks that began last fall and has accelerated since. Short-term volatile swings tied to the Iran war have masked this broader, market-wide compression in equity multiples, implying a more cautious outlook for U.S. equity valuations.