Its Over, page-22367

...the only bear left

KOLANOVIC: “.. Our cautious stance has been based on our view that there is no re-rating upside, and that any upside had to therefore come from earnings growth, which we see being insufficient to take on equity risk even under best case scenario assumptions. For equities to avoid a 20%+ correction, you have to believe that tech will become a much more meaningful driver of growth for the broad economy in short order. While we believe tech will continue to be the key driver of economic growth for years to come, we don’t think its impact on corporate P&Ls across the board will be that profound so suddenly, and so we remain cautious here, expecting economic growth to weaken, equities to correct, and investors to find a better entry point.”

https://x.com/carlquintanilla/status/1802759982422585376

Do you understand what Equity Risk Premium means?

If you park in cash, you can get 5% pa risk free. So if you park in equities, you'd expect a higher return, right? That extra return is Equity Risk Premium.

Right now, the P/E ratio of the Aussie market (on 17 June) is 19.6x. That represents an earnings yield of 5.1%.
In other words, investors are barely pricing in an equity risk premium.

Which means the valuation of equities right now offers no cushion in returns over and above what you could get in a risk-free term deposit.

Look at Commonwealth Bank. It trades on a P/E of 22 times, or an earnings yield of 4.54%. That's lower than 5%.

PLS at 2025 projected P/E of 42 times or an earnings yield of 2.38%.