US stock market expensive, record-breaking run may just be "sugar-high"

The S&P 500 rose one percent last week, hitting a record high in the process before slipping at the end.

Some analysts doubt that the US stock market will continue its strong run though.

Roger Aitken at Forbes wrote that US stocks are “unlikely to perform better” during Donald Trump’s tenure as 45th President than under many of his predecessors.

Citing Source ETF, an independent ETF provider authorised and regulated by the Financial Conduct Authority in the UK, Aitken said that the S&P 500 delivered an annualized return of 13.9 percent under Barack Obama and 15.2 percent under Bill Clinton.

However, with the S&P 500 currently at a Shiller price-earnings ratio of more than 28, it is unlikely that it will do better under President Trump.

Aitken quoted Paul Jackson, Head of Research at Source, as saying that “we would favour treasuries over the S&P 500 for the rest of the first quarter”.

Lawrence Summers, writing at the Washington Post, wrote that “markets and the economy are most likely enjoying a sugar-high that will not last a year”.