Strategists Divided on Market Bubble Risk Despite High Valuations
• BofA strategist Savita Subramanian believes the market is not in a bubble like 2000 or 2007 despite high valuations, pointing to differences like lower leverage and higher quality companies.
• Subramanian argues it's more like 1995 than 1999 - investor euphoria is still muted and tech leadership is driving gains, indicating more room for the bull market to run.
• Bears counter that conflicting economic data and speculative areas of the market driven by liquidity, not fundamentals, signal trouble ahead.
• Morgan Stanley's Mike Wilson sees a 12% drop ahead due to "ambiguity" from policy mix and excess liquidity artificially inflating asset prices.
• Wilson believes earnings must accelerate more for the rally to be sustained, otherwise gains are vulnerable to a correction.