JP Morgan and Goldman Sachs CEOs speak out together: US stock market valuation is "overvalued"

Jamie Dimon, CEO of JPMorgan Chase, said on Wednesday that the American stock market is somewhat overvalued, and he is more cautious than others in the business world due to risks posed by deficit spending, inflation, and geopolitical turmoil. Dimon also pointed out that certain bond markets, such as sovereign debt, are at "historically high levels." Dimon stated, "By whatever standard you want to measure, asset prices are a bit high. Their historical valuations are in the top 10% or 15%." Dimon said that he was referring to the American stock market, which is currently in an ongoing bull market that has lasted for several years. The S&P 500 index saw gains of over 20% for two consecutive years in 2023 and 2024, a first in 25 years. Last year, Dimon even stated that his company's stock price was too high. Dimon said, "So prices are indeed rising, and you need pretty good outcomes to justify those prices. Setting up strategies that promote growth can help achieve this objective, but there are negative factors as well, which often come as a surprise." At 68 years old, Dimon is one of the most respected voices in the financial industry, having turned JPMorgan Chase into the largest bank by various metrics such as assets and market valuations. Since 2022, he has been issuing warnings, stating back then that a "storm" was coming towards the American economy. However, with the American economy exceeding expectations in recent years, this storm has yet to materialize, and with Trump's election as U.S. president in November 2016, there is hope for policies supportive of the economy. Dimon stated on Wednesday, "I am indeed more cautious about some issues. I'm a little cautious about deficit spending; it's a global problem, not just a U.S. one. The related question is, will inflation disappear? I'm not so sure. Escalating global conflicts such as the Russia-Ukraine war and tensions in the Middle East make me very concerned about how these conflicts will impact the world in the next 100 years." In this wide-ranging interview, Dimon expressed support for tariffs on imported goods to the U.S., provided they enhance national security. He also mentioned that he has reconciled his controversial relationship with tech entrepreneur Elon Musk. Dimon also stated that he has no intention of running for office in 2028. Later on Wednesday, Goldman Sachs CEO David Solomon also acknowledged the high valuations in the stock market, while expressing enthusiasm for the impact of artificial intelligence and expectations for Trump's anticipated easing of regulations on American companies, which he deemed reasonable. Solomon said, "The fact that stock market valuations are high is undeniable. Looking ahead in the market, the regulatory environment for all industries is very, very challenging. If Trump administration officials allow more mergers to occur, promoting capital market activity, this could boost GDP growth by half a percentage point."