Even if the valuation continues to rise, Fidelity’s macro chief investor said, “Investors still seem to have a good year in the market,” even if the valuation is The value is still increasing. GR (NYSE: GS), Amazon.com (NASDAQ: AMZN)

Jurrien TimmerGlobal Macro Director AT Loyal to investexpressed concerns about the strength of the S&P 500 recovery. His insights are in the context of high valuations and strong corporate earnings.

what happened: On Tuesday, Timmer said the S&P 500’s equal weight index remains below its all-time high, with only 53% of stocks above its 50-day moving average. He believes this indicates a weak rebound after a 5% drop in the recent 5%.

Despite the weaker recovery, Timmer noted that sentiment remains constructive, especially in terms of fair flows. He concluded that the cyclical bull market, now 28 months old, is still in its original place. However, he also noted that only 62% of stocks are above their 200-day moving average, a sign of potential negative divergence.

“While valuations did not reach the extremes of 2000, 1973 or 1929, their valuations were improved when bond yields became competitive again,” Timmer further explained.

See: The bull market lasts on average for 7.9 years, but the third-year returns may be weak.

Why it matters: Timmer’s observations show that the valuation is shocking when the Warren Buffett metric soars to 205%. This indicator compares total stock market capital with GDP, which is much higher than the pre-crisis level.

Meanwhile, FactSet revealed that the S&P 500-year company had a year-on-year earnings growth of 16.4% in the fourth quarter of 2024, its best performance since the end of 2021. But through new trade uncertainty, investors’ optimism is eased. The best performer is Goldman Sachs Group GS and JPMorgan Chase & Co JPM From the financial sector Meta Platform Yuan and Amazon Amzn The best performers in the communications services and consumer discretion departments, respectively.

Overall, Timmer envisions a “golden year” transition of this super loop, from the growth of valuation expansion of earnings (as seen in 2023 and 2024) to the stage where they balance them. This won’t mark the end of a bull market, but represents the pinnacle of double-digit returns.

S&P 500, by SPDR S&P 500 ETF spyhas risen 4.11% in the past month, trading at $605.31 as of Tuesday. NASDAQ-100, tracking Invesco QQQ Trust QQQup 4.44% during the same period, trading at $527.99. at the same time, Dow Jones Industrial Average Futures Today it is $44,678.00, down 30.00 points or 0.06%, according to Benzinga Pro.

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Disclaimer: The content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.