77% of US CFOs consider stocks overvalued

The reluctance to put up with obvious things does not mean that these things cease to exist. Accordingly, the reluctance of the US stock market to fall today does not mean that it will not collapse tomorrow. The fundamental basis for this has been formed for quite some time and everything rests only on the non-recognition of the obvious - the market is very overvalued and needs to be corrected.

Investors can be understood because the beginning of the correction with a high degree of probability will provoke the formation of a full-fledged panic wave, which will turn this very correction into uncontrolled sales.

If you ask almost any professional to honestly answer the question of whether the US stock market is overvalued, the answer in most cases will be unequivocal - "yes, it is."

Actually, in today's review, we would like to present the results of a similar survey conducted by specialists of one of the largest audit companies in the world, Deloitte. Moreover, the survey was conducted not among traders or investors, that is, often biased respondents, but among financial directors of major US corporations. Essentially a survey of insiders. 147 CFOs from the USA, Canada, and Mexico from companies with an annual turnover of $3 billion and above were interviewed.

So, 77% of respondents believe that the stock market is overvalued. In essence, the directors state that yes, their stocks are worth much more than they should be. Such an answer can only be explained by one thing - they could not give a different answer because of the evidence of the fact.

At the same time, they expect a continued slowdown in economic growth in 2020 both in the United States and in the world. In general, the level of optimism of the directors surveyed is at the lowest level over the past 3 years.

Another interesting fact that follows from the results of the survey is that American companies are not only aware of the problem, but are also actively preparing to deal with possible consequences: they reduce costs and optimize the number of employees. 82% of respondents admitted that they take preventive protective measures.

Finally, we give one more fact. 97% of the CFOs of American companies believe that the economic downturn has already begun or will begin in 2020.

Buying stocks on such a background is pure madness. But the main US stock indices, however, continue to update historical highs.

Recall that we consider 2019 the last year of unjustified growth in the US stock market. Already in 2020, it will begin to adjust. The scale of correction is from 50% and higher. Given that in recent years, shares of technology companies in the US stock market have grown by an average of 7-8 times (and some issuers have shown growth of 10 or even 20 times), the US stock market will no doubt become the object of massive sales. We recommend participating in this process, selling both the market as a whole (Nasdaq index) and the shares of individual issuers (Apple, Microsoft, Alphabet, Oracle, etc.).