The rally that has sent the stock market to record highs is too much too soon and likely too enthusiastic, according to economist and investment advisor Gary Shilling, founder of A. Gary Shilling & Co. "Without question, the new vaccines have dramatically changed the economic outlook, but the euphoria seems overdone. Economic weakness could well persist for another year—disappointing to equity bulls but beneficial to Treasury bondholders," writes Shilling in his latest Insight report. "Stocks are priced for perfection," oblivious to such warning signs such as the volatility in the VIX, which has closed above 20 for almost 200 consecutive trading sessions. In eight past periods when the VIX topped 20 for at least 100 days, the S&P 500 has fallen, writes Shilling, citing Dow Jones Market Data . Shilling expects the recession will "renew" in the balance of this year and persist into 2021. And when that shift becomes more apparent to investors, they will move from a "risk on" strategy to a "risk off" on, according to Shilling. Check out the slideshow above for more on why Shilling is pessimistic about the outlook for the U.S. economy and for equities. --- Related on ThinkAdvisor:
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