Here is a link to the full report and here is a section from it:
In marketing our outlooks, we saw a number of areas where investors generally agreed with us… We heard broad agreement that a US-China trade deal looks likely but unexciting, that global growth is troughing and that ex-US equities offered better return prospects relative to the US. Investors seemed more positive on Asia and EM, but a reasonable number also saw European upside. Most investors see limited upside to the S&P but agree central bank balance sheet expansion could lead to an overshoot of fair value.
…and a number of areas where opinions differed. We heard common push back that we are (modestly) too bearish on earnings growth and the outlook for cyclicals, as many investors expect better global growth to translate into more robust US earnings growth. We also received push back on our relative preference for defensives, with some investors seeing cyclical upside vs defensives as growth and rates inflect and other, less sanguine investors, preferring Growth to defensives given only a modest rebound expected in the US economy. Another common theme was that we are not bearish enough around the potential impact of the US election on business sentiment, investment, and the market multiple.
It takes all kinds of views to make a market and that is particularly true when supply and demand have been in relative equilibrium for almost two years. When that amount of time has passed both the bullish and bearish arguments are well understood.
There are a number of measures that tend to move to extremes ahead of recessions which are at warning levels. Everything from the yield curve spread to the number of countries with yields below that of the USA, to CEO sentiment are deteriorating.
However, the primary point is the greatest chance of a bubble evolving is exactly when valuations move into expensive territory. A mania requires investors to look past valuation arguments because they are more concerned with missing out on opportunities for profit. The success of valuation agnostic investing, momentum, ETFs, quantitative strategies all suggest this is well underway.
The greatest redeeming quality about chart reading is it tells us what people are really doing with their money. The primary Wall Street indices have broken on the upside and continue to extend their advances. Europe, Japan, South Korea and Taiwan have either broken out or are breaking downtrends. These moves would have to fail before the most bearish prognostications look credible.