JPMorgan strategist Mislav Matejka cautions that U.S. stocks are trading at lofty multiples with sentiment stretched—creating a risk-reward profile unlike any in recent history. Here’s how he sees the landscape and where he believes investors should look instead.

1. U.S. Valuations Priced for Perfection

21× Forward EPS: The S&P 500’s multiple far exceeds levels consistent with even a mild slowdown.

Aggressive Earnings Forecasts: Wall Street consensus assumes 10% EPS growth this year and 14% next, leaving little room for error if economic headwinds intensify.

To track evolving valuation metrics and forward-looking profitability, portfolio managers often pull data from the Ratios TTM Statement Analysis API, which provides up-to-the-minute forward P/E ratios, EPS revision trends, and margin profiles across sectors.

2. Recession Risks and Sentiment Fragility
Matejka warns that while a recession could still be averted, its odds aren’t reflected in today’s prices. Soft leading indicators—such as ISM services dips—hint at emerging weakness, and the Fed may find itself behind the curve if inflationary pressures persist.

Tech & Growth Vulnerability: Once viewed as defensive, high-beta tech names now amplify market swings, making U.S. Growth a riskier “safe haven.”

3. International Markets Offer Better Opportunities
With U.S. equities “not a good place to hide,” Matejka highlights several regions:

Japan: Benefiting from corporate reforms and domestic demand, the Nikkei trades at a notable discount to its U.S. counterpart.

U.K.: A “good place to hide” thanks to defensive sectors, attractive valuation, and relative insulation from trade shocks.

Eurozone: While unlikely to decouple from U.S. moves, the region needn’t underperform—Germany’s fiscal expansion provides a supportive backdrop.

4. Key Takeaways for Investors

Reassess U.S. Exposure: High forward multiples and stretched positioning warrant caution.

Leverage Real-Time Ratios: Use FMP’s TTM ratios feed to monitor shifts in P/E, ROE, and forward EPS revisions.

Diversify Globally: Rotating into Japan, the U.K. and selectively into the eurozone can offer more balanced risk-reward dynamics.

By blending top-down macro insights with live valuation metrics, investors can better position portfolios for an environment where U.S. equities may struggle and international markets stand out.