US stocks are the most expensive vs. bonds in 20 years - prepare for returns to remain weak for years, strategist says

• With the S&P 500 powering toward all-time highs, US equities are looking pricey by some measures.
• One expert has pointed out that US stocks are now the most expensive versus bonds in 20 years. 
• That, along with an uncertain economic outlook, signal weak equity returns in the coming years, according to Pictet Asset Management's Luca Paolini.

US stocks enjoyed a surprisingly buoyant first half, defying recession warnings, as investors took heart from the prospect that the Federal Reserve may be close to ending its interest-rate increases. The hype over AI also proved a strong support for the market, fueling massive gains in mega-cap tech names.

However, a growing chorus of experts are now pointing out that equity valuations are now looking increasingly stretched, raising the risk of a correction.