SEB: It looks like a stock market correction is in the cards

The major bank keeps underweighting equities as the stock market appears to be overly optimistic causing valuations to be "challengingly high".


In the near term, the stock market appears to be overly optimistic. Sentiment has shifted from pessimistic to highly optimistic in the course of a few months, writes SEB in its new Investment Outlook.

Consequently, a stock market correction is in the cards, the major banks writes, adding that a better economy has largely been priced in, which limits upside stock market potential in the near term. Thus, SEB recommends a smaller proportion of equities than its long-term average.

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