The CEOs of Morgan Stanley and Goldman Sachs jointly stated: U.S. stock valuations are "overvalued"
JPMorgan Chase CEO Jamie Dimon stated that U.S. stock market valuations are "overinflated" and expressed caution regarding deficit spending, inflation, and geopolitical risks. He pointed out that asset prices are at historical highs, particularly in the sovereign debt market. Despite the U.S. economy performing better than expected, Dimon expressed concerns about future global conflicts and their impacts. He supports imposing tariffs on imported goods to promote national security
According to Zhitong Finance, JPMorgan Chase CEO Jamie Dimon stated on Wednesday that the U.S. stock market is somewhat overvalued and expressed that he is more cautious than others in the business community due to risks posed by deficit spending, inflation, and geopolitical turmoil. On Wednesday, Dimon also pointed out that some bond markets, such as sovereign debt, are at "historically high levels." Dimon stated, "By any measure, asset prices are somewhat overvalued. Their historical valuations are in the top 10% or 15%."
Dimon mentioned that he was referring to the U.S. stock market, which is currently in a prolonged bull market. The S&P 500 index has seen gains of over 20% in both 2023 and 2024, marking the first time in 25 years this has occurred. Last year, Dimon even described his company's stock price as too high.
Dimon said, "So, prices are indeed rising, and you need quite good results to justify these prices. Developing strategies that promote growth helps achieve this, but there are also negative factors that can often catch you by surprise."
At 68 years old, Dimon is one of the most respected voices in finance, having built JPMorgan Chase into the largest bank by various metrics, including U.S. assets and market valuations. Since 2022, he has been issuing warnings, stating that a "hurricane" is approaching the U.S. economy. However, as the U.S. economy has exceeded expectations in recent years, this storm has yet to arrive, and with Trump's election as U.S. president last November, there is hope for policies that support the economy.
Dimon stated on Wednesday, "I am indeed more cautious about some issues. I am somewhat cautious about deficit spending; this is a global issue, not just a U.S. issue. The related question is, 'Will inflation disappear? I'm not so sure. The ongoing escalation of global conflicts, such as the Russia-Ukraine war and tensions in the Middle East, makes me very concerned about how these conflicts will affect the world over the next 100 years.'"
In this wide-ranging interview, Dimon expressed support for tariffs on U.S. imports, provided they promote national security. He also mentioned that he and tech entrepreneur Elon Musk have eased their previously controversial relationship. Dimon further stated that he has no intention of running for office in 2028.
Later on Wednesday, Goldman Sachs CEO David Solomon also acknowledged that stock market valuations are high, while noting that enthusiasm for the impact of artificial intelligence and expectations for Trump to ease regulations on U.S. companies are reasonable.
Solomon stated, "The fact that stock price-to-earnings ratios are high is undeniable. The market is looking ahead, and the regulatory environment across all industries is very, very challenging. If Trump administration officials allow more mergers to occur and promote capital market activity, it could boost GDP growth by half a percentage point."