S&P 500 Overvaluation Signals Rare Market Warning

The S&P 500 is reportedly 20% overvalued, despite a strong upward momentum, according to Jack Ablin, CIO at Cresset Asset Management. While traditional valuation measures suggest caution, momentum indicators remain positive. Investors are advised to watch for signs of trouble, such as a decline in momentum or support for high-momentum stocks like Amazon, Nvidia, and Meta. Potential market risks include geopolitical shocks, changes in Fed policy, and corporate fraud. With a 10-year expected return of 5% for the S&P 500, alternatives like BBB corporate bonds may offer better returns with lower volatility.