The Trump trade might be overdone. Even after the post-Jan. 30 slide, following the president’s controversial executive order on immigration curbs on seven Muslim countries, U.S. stocks remain “highly overvalued,” relative to 2018 earnings expectations, according to Credit Suisse.
“…on current 2018 expectations, U.S. stocks still look highly overvalued, with FY2 P/E’s in line with past highs for both small caps and large caps,” the Swiss bank’s U.S. Equity Strategy team said in a newsletter Feb. 2. Using FY2 P/E, small caps look pricey vs. large, though they don’t yet look expensive on the bank’s multi-factor model, it added.
“Some upside to 2018 EPS expectations may eventually materialize, but until it does, it is difficult to argue against the idea that...
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