(Bloomberg) — Corporate finance chiefs say something looks off with the U.S. stock market.
About 84% of chief financial officers said equities are too expensive in a quarterly survey conducted by Deloitte LLP — the second-highest level in the decade since the accounting and consulting firm began collecting the data. Only 2% of respondents said U.S. stocks look cheap.
That may not come as a surprise with the S&P 500 trading at all-time highs, up 55% from March lows, but the data provide further insight into the views of corporate management, particularly the finance departments responsible for capital expenditures. At 27 times earnings, the S&P 500’s price-earnings ratio is hovering near the highest level since the early 2000s.
Deloitte collected responses from 155 CFOs across North America, most of whom work at companies with more than $1 billion in annual revenue. The survey spanned Aug. 3 to Aug. 7. Since then, the S&P 500 is up another 3.8%.
The finance executives did grow slightly more optimistic on the economy, albeit from record lows, as the U.S. began recovering from the depths of the Covid-caused recession. In the most recent report, 7% of respondents rated current economic conditions in North America as good, up from just 1% in the prior survey period. However, only 43% said they expect better economic conditions in a year — down 15 percentage points.
“Economic expectations were improved from really historic lows in the 2Q survey, but more cautious,” Steve Gallucci, Deloitte’s U.S. leader of the CFO Program, said by phone. “Most CFOs felt like it was going to take a lot longer to get their operating capacity back up to pre-pandemic levels.”
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