A few days ago, the well-known investment bank Morgan Chase sent a report to investors.。In the report, three of Komo's analysts, Marko Kolanovic, Bram Kaplan and Dubravko Lakos-Bujas, noted that the downside risk to U.S. stocks at this stage is greater than the upside risk, and listed three major risks that currently pose challenges to U.S. stocks.。

The three main risks are: still high market valuations, overly optimistic investor positions, and continued tightening in the form of interest rate hikes and the Fed's plan to shrink its balance sheet.。

These three points coincide with the opinions of other analysts in the market.。

U.S. stocks overvalued

In fact, as early as early as September, the well-known research firm CFRA Research pointed out in a report that there is a clear complacency in the current U.S. stock market, as the panic index VIX is close to historical lows, while investors' positions have increased to above-average levels.。

According to CFRA Research, the reason for this phenomenon is the FOMO sentiment of investors.。Driven by this sentiment, investors will blindly buy stocks for fear of not keeping up with the upward pace of share prices, leading to increased market risk。

According to CFRA Research calculations, the MSCI U.S. Index's 12-month forward P / E ratio has reached 19 times, a level that is relatively high, especially compared to the higher real yield.。They said that while the price-to-earnings ratio is positively correlated with earnings per share momentum, earnings expectations could be cut again.。

This risk point is also reflected in Xiaomo's report, Xiaomo believes that this year's U.S. stocks out of the market stocks are too concentrated。Kolanovic said most of the stock market's gains this year have been concentrated in a few large technology stocks, while huge fiscal spending in 2021 and 2022 is starting to slow and consumers' cash savings are running out.。

"Cash is king" strategy hits U.S. stock market

With investors cash-strapped and benchmark interest rates high, investors may shift to holding more liquid assets, such as cash。If this is the case, the withdrawal of liquidity will also be a big blow to U.S. stocks.。

This view has also been confirmed in the market.。

Currently, U.S. six-month Treasury bills yield about 5.5%, the highest level since 2001, which is even higher than the S & P 500's net return indicator (about 4.7%)。According to data compiled by Bloomberg, this is the biggest advantage that cash has enjoyed over stocks since 2000.。

Analysts say investors are increasingly opting for cash (rather than stocks) as the Fed's determination to keep interest rates high for a long time is firmly rooted in market psychology。Money market fund assets hit 5 in September, according to data compiled by Todd Sohn, strategist at Strategies Securities.$6 trillion in record highs, while about $17 billion has poured into cash-based exchange-traded funds (ETFs) in the past three months as investors seek high yields.。

Kolanovic says all that is happening now confirms his pessimistic view that investors should favor cash, which currently yields about 5 percent, over stocks。The analyst also said that this situation is likely to continue as long as interest rates remain in a highly constrained area and geopolitical risks persist.。

Finally, Kolanovic warns against counting on the AI boom to save the economy。He believes that while AI can boost the stock market in a speculative way, "it could also go away soon."。"