Warning that U.S. stocks increasingly resemble a bubble, Rosenberg shifts to U.S. bonds and overseas equities

Economist David Rosenberg, who warned of the U.S. housing bubble prior to the 2008 financial crisis, stated that the U.S. stock market increasingly resembles a bubble; valuations, leverage, and investor positioning have all reached extreme levels unseen in his 40-year career.

Speaking at Grant’s Annual Fall Conference in New York, he noted that the current bull market’s reliance on AI development is even deeper than the stock market’s dependence on the tech sector prior to the dot-com bubble. He identified the U.S. as the epicenter of this tech craze, noting that investors have paid excessive prices for it.

He remarked that not only the market but also the economy is exhibiting unprecedented disparities, extremes, and imbalances. “If you don’t want me to call it a bubble, I won’t. But what I am seeing is something I have never seen before.”

Rosenberg is the founder of the Toronto-based firm Rosenberg Research & Associates and a former chief North American economist at Merrill Lynch; he is known for his bearish stance. He stated that he has added U.S. Treasuries and overseas equities to his investment portfolio.

He also warned of vulnerabilities in U.S. economic fundamentals, noting that consumers are increasingly relying on a rising stock market to sustain their daily lives. He highlighted that those who have retired early and live off investment assets, in particular, will face difficult choices when the next bear market arrives.