Via ConvergEx’s Nichaolas Colas,
If U.S. equities feel brittle, they should. Even though the S&P 500 is up 2.6% on the year, all that gain has come since early April – Q1 was a washout for large caps with the headwind of a stronger dollar. Valuation of 18x current year earnings means domestic stocks are priced for perfection in a distinctly imperfect world: negative revenue growth for multinational companies, increasingly negative earnings comparisons, and a domestic economy stuck in (at best) first gear.