Jamie Dimon says alarm on stocks, says market looks ‘kind of inflated’

• JPMorgan CEO Jamie Dimon warned that the stock is overvalued.

• Dimon sees lingering risks including inflation, government deficit spending, and geopolitical tensions.

• Dimon’s comments echo a recent warning from Goldman Sachs that the market is “priced for perfection.”

JPMorgan CEO Jamie Dimon sounded the alarm on stocks in an interview today at the World Economic Forum in Davos, Switzerland, saying the market appears overvalued.

“Asset prices are inflated, by any measure,” Dimon told CNBC in Davos. He added that “they are in the top 10% or 15%” of historical valuations.

the S&P 500 It is less than 1% away from hitting a record high, and high valuations have been a hallmark of the current market rally that began in October 2022.

The S&P 500 is trading at a forward price multiple of 21.6X, which is higher than its five-year and 10-year averages of 19.7x and 18.2x, respectively.

Dimon said many things have to go for the stock market to continue its record run.

“It’s high, and you need fairly good results to justify those prices. Having pro-growth strategies helps with that, but there are downsides there, and they can tend to surprise you,” Dion said.

Some of the “negatives” that Dimon cites include the potential for a rebound in inflation, continued risks from government deficit spending, and ongoing geopolitical risks.

“What I’m a little wary of is deficit spending; it’s a global issue, not just an American issue,” he said. “And the related (question), ‘Will inflation go away?’ “I’m not sure.”

Damon’s cautious comments come through The new Trump administration releases “animal spirits” that… It helped spark a rally in the stock market.

Stanley Druckenmiller, a top hedge fund investor, used the term in an interview with CNBC on Monday. He said that in his 49-year career, he had never seen such a face in Washington, D.C., from the perceived anti-business stance of the Biden administration to the pro-business stance of the Trump administration.

“We do a lot of talking to CEOs and companies on the ground, and I would say CEOs are somewhere between relaxed and staid,” Druckenmiller said. “So we believe in animal spirits.”

But Dimon isn’t the only one with a cautious view of the stock market.

A recent note from strategists at Goldman Sachs suggested so The stock market is “perfectly priced.”

The bank said it sees the stock market as increasingly vulnerable to a correction this year, especially given valuations and historically high concentration in a handful of stocks.

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