As markets enter the new year, commentators highlight the tension between investor sentiment and fundamental valuation levels. The piece argues that valuation metrics serve as a crossover between sentiment and fundamentals and cautions that signals of deep pessimism would be inconsistent with historically elevated valuations. "I cannot really imagine a situation where an indicator credibly points to negative sentiment and strong risk aversion while valuations are historically very high," the commentary states (30 Dec 2025).

Key takeaways: current valuation measures remain above long-term norms, suggesting limited coherence with any narrative of broad risk aversion. The note implies investors should weigh valuation context alongside sentiment indicators when assessing market direction in early 2026. #markets #valuation #sentiment #stocks #FiatNews