There is a massive deviation between stock valuations and earnings growth: growth in the former is far outpacing the latter.

This is unsustainable warns portfolio manager Lance Roberts.

And unless economic growth suddenly surges (and no catalyst for that is on the radar), then asset prices will need to come down in order to bring the ratio back into balance.

And with GDP growth coming in at1.4% in Q1 and currently at 1.7% (and slowing) here in Q2, asset price reduction indeed seems like the more probable outcome.

In this video, Lance and I discuss this, as well as market technicals, whether the latest inflation & jobs data increase the odds for a near-term rate cut by the Fed, the importance of sentiment, the latest market technicals and Lance's recent trades.

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