Why Stocks May Be Doubly Dangerous

I've spent quite a bit of time opining on both the re-rating in US equities that played out over the first five weeks of 2023 and the risk to earnings estimates going forward. The issue with the early-year multiple expansion was that it outpaced what could be justified by the concurrent decline in real US yields. The forward multiple tends to exhibit an inverse relationship with real rates (for obvious reasons), and although 10-year reals did recede materially from early January through Februa