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We Wouldn’t Be Too Quick To Buy The Williams Companies, Inc. (NYSE:WMB) Before It Goes Ex-Dividend

It looks like The Williams Companies, Inc. (NYSE:WMB) is about to go ex-dividend in the next four days. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company’s books as a shareholder in order to receive the dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. This means that investors who purchase Williams Companies’ shares on or after the 9th of December will not receive the dividend, which will be paid on the 27th of December.

The company’s upcoming dividend is US$0.41 a share, following on from the last 12 months, when the company distributed a total of US$1.64 per share to shareholders. Last year’s total dividend payments show that Williams Companies has a trailing yield of 6.0{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} on the current share price of $27.11. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. As a result, readers should always check whether Williams Companies has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for Williams Companies

Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Williams Companies distributed an unsustainably high 196{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of its profit as dividends to shareholders last year. Without more sustainable payment behaviour, the dividend looks precarious. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. Over the last year it paid out 75{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of its free cash flow as dividends, within the usual range for most companies.

It’s good to see that while Williams Companies’s dividends were not covered by profits, at least they are affordable from a cash perspective. Still, if the company repeatedly paid a dividend greater than its profits, we’d be concerned. Very few companies are able to sustainably pay dividends larger than their reported earnings.

Click here to see the company’s payout ratio, plus analyst estimates of its future dividends.

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historic-dividend

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it’s easier to grow dividends when earnings per share are improving. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. This is why it’s a relief to see Williams Companies earnings per share are up 4.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} per annum over the last five years.

Many investors will assess a company’s dividend performance by evaluating how much the dividend payments have changed over time. Since the start of our data, 10 years ago, Williams Companies has lifted its dividend by approximately 13{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} a year on average. We’re glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.

The Bottom Line

Should investors buy Williams Companies for the upcoming dividend? Earnings per share have not grown all that much, and the company is paying out an uncomfortably high percentage of its income. Fortunately it paid out a lower percentage of its cash flow. With the way things are shaping up from a dividend perspective, we’d be inclined to steer clear of Williams Companies.

So if you’re still interested in Williams Companies despite it’s poor dividend qualities, you should be well informed on some of the risks facing this stock. Our analysis shows 2 warning signs for Williams Companies and you should be aware of them before buying any shares.

A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} yield and an upcoming dividend.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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2 big market risks for 2022, according to Bank of America

Markets should be wary of high inflation and the potential spread of new COVID variants in 2022, a new Bank of America (BAC) report warns.

“Future COVID waves are the biggest downside risk,” the report noted. “On the upside, the supply-side wakes up to meet the gains in demand.”

Authored by several Bank of America Global Research economists, the report mainly focuses on the various threats to the global economy in 2022 and beyond.

Among these economic risks are high inflation rates, the spread of variants like the recent Omicron strain, climate change, and supply constraints.

The emergence of the Omicron variant in November left its mark on markets at the end of last month, with the Dow Jones falling over 1500 points the week following Thanksgiving.

Earlier this month, World Health Organization chief scientist Soumya Swaminathan spoke at the Reuters NEXT Conference where she emphasized the variant’s high transmissibility and noted that it could one day become the dominant COVID strain around the world.

The report found that the unprecedented fiscal stimulus enacted by the federal government to counter COVID-related economic issues should ensure that “the U.S. will resume its role as an engine of global growth, while China will be a reluctant laggard.”

China-US relations were a cause for concern for the global economy as well, the authors wrote in the report. “There is also considerable uncertainty about how relations between China and the West will develop. A rapid unravelling of economic interlinkages could trigger a global recession.”

Even if the new COVID variants which emerge in the next year are controlled to the utmost extent, inflation concerns still might make for a murky future for US economic growth.

Trader John Romolo works on the floor of the New York Stock Exchange, Thursday, Dec. 2, 2021. Stocks are opening mostly higher on Wall Street Thursday as investors continue to monitor the spread of the new coronavirus variant as well as measures that the U.S. and other governments are taking to restrain it. (AP Photo/Richard Drew)

Trader John Romolo works on the floor of the New York Stock Exchange, Thursday, Dec. 2, 2021. Stocks are opening mostly higher on Wall Street Thursday as investors continue to monitor the spread of the new coronavirus variant as well as measures that the U.S. and other governments are taking to restrain it. (AP Photo/Richard Drew)

A ranking from the report of 10 different currencies from around the world found that the U.S. had the highest inflation score, at 46. It was followed by the New Zealand dollar, at 38, and the Great Britain Pound, at 37.

“It’s been a bit nerve wracking to watch the recent very strong inflation readings,” the report noted. “In the summer, most of the increase was driven by spikes in specific sectors, but in the last few months the pressure has moved into the middle of the inflation distribution … Relative to a year ago, we have raised our global CPI inflation forecast for this year from 2.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to 3.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and for next year from 2.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to 3.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.”

Overall, inflation should cool, even in the U.S. The CPI was 6.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in October, continuing the rampant inflation not seen domestically in decades. Although this rate of inflation may subside slightly, Bank of America Global Research cautioned that inflation may still be a significant issue for the economy in the short run. BofA’s Chief US Economist Michelle Meyer and VP Alexander Lin wrote that three rate hikes in 2022 were very possible, looking forward.

“Inflation will cool from the current highs but remain well above target, leaving the Fed to move into action,” the report predicted. “While 2021 was a story of excess demand and a dearth of supply, we think 2022 will be one of rebalancing, albeit only gradually. This should take some of the heat off of inflation but not quickly enough, leaving the Fed to hike three times starting in June and continuing on a quarterly cadence.”

Ihsaan Fanusie is a writer at Yahoo Finance. Follow him on Twitter @IFanusie.

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Today’s Live Business News: Jobs Report, Inflation and Stocks

The United States faces a default sometime between Dec. 21 and Jan. 28 if Congress does not act to raise or suspend the debt ceiling, a Washington think tank warned on Friday.

The projection from the think tank, the Bipartisan Policy Center, was a narrower window than it provided last month, and the nonpartisan group suggested that the actual deadline, or X-date, could be toward the earlier end of that range.

Democrats and Republicans appear to have tempered their tone around raising the debt limit this time around. While lawmakers have not settled on a path to lifting the borrowing cap, they are exploring a series of ways to raise it, including some that could ultimately hand more power to the White House to avoid the kind of standoffs that have routinely crippled Washington.

Republicans continue to publicly insist that Democrats must act alone to address the issue, while Democrats have countered that raising the borrowing cap is a shared responsibility given that both political parties have incurred big debts over the last several years.

“Those who believe the debt limit can safely be pushed to the back of the December legislative pileup are misinformed,” said Shai Akabas, the director of economic policy at the Bipartisan Policy Center. “Congress would be flirting with financial disaster if it leaves for the holiday recess without addressing the debt limit.”

Treasury Secretary Janet L. Yellen warned lawmakers in November that the United States could be unable to pay its bills soon after Dec. 15. During testimony before the Senate Banking Committee this week, she underscored the urgency of the matter.

“I cannot overstate how critical it is that Congress address this issue,” Ms. Yellen said. “America must pay its bills on time and in full. If we do not, we will eviscerate our current recovery.”

In September, Ms. Yellen called for the debt limit to be eliminated, explaining that it had become a destructive policy that posed unnecessary risks to the economy. After approaching the first default in American history, Congress in October raised the statutory debt limit by $480 billion, an amount the Treasury Department estimated would allow the government to continue borrowing through early December.

Congressional leaders have been quietly discussing ways to address the debt ceiling, after Republicans warned that they would not help Democrats clear the 60-vote threshold needed to break a Republican filibuster against legislation to raise the borrowing cap.

Senators Chuck Schumer of New York, the majority leader, and Mitch McConnell of Kentucky, the minority leader, have spoken repeatedly in recent weeks about the issue, but they have remained tight-lipped in public about a possible solution.

The debate has been further complicated by former President Donald J. Trump and his continued influence over the Republican Party. He has repeatedly railed at Mr. McConnell and the other Republican senators who backed a procedural vote in October that cleared the way for Democrats to raise the debt limit.

But Mr. McConnell, while pushing for Democrats to raise the borrowing cap without help from his conference, pledged this week that a default would be avoided.

Credit…Al Drago for The New York Times

“Let me assure everyone the government will not default, as it never has,” Mr. McConnell said on Tuesday. Pressed further, he added, “We’re having useful discussions about the way forward.”

Cut out of both the $1.9 trillion coronavirus relief package that passed in March and the $2.2 trillion climate, tax and spending plan that Democrats are trying to push through the Senate, Republicans have refused to help Democrats accommodate debt incurred by both parties. They have taken that position even though leaders of both parties signed off on the spending that helped the debt balloon.

Democrats, in turn, have balked at a Republican demand to use a fast-track process known as budget reconciliation to raise the debt limit without Republican votes. Democrats used the process to pass the coronavirus relief package and they are using it again for the climate, tax and spending plan, but they have argued that Republicans should help keep the government from defaulting.

Aides in both parties, while cautioning that a solution has not been agreed to, noted that party leaders had so far refrained from publicly trading blame over the issue.

As a way of navigating around the impasse, some officials have discussed the possibility of handing the authority of raising the debt limit to the administration, while granting Congress the ability to disapprove the decision with just a simple majority.

Some lawmakers, however, may be unwilling to hand that power to the White House or lose a cudgel often used by the minority party to exert pressure, particularly while 60 votes are needed to end a filibuster in the Senate.

Other officials have floated attaching legislation raising the debt limit to the sprawling annual defense policy bill, which is the last major must-pass piece of legislation that lawmakers plan to approve in December.

But it is unclear whether such a plan would be successful: Attaching a debt ceiling increase could jeopardize the Republican votes needed to counter the bloc of liberal Democrats who typically oppose the defense bill in protest of military spending. Representative Kevin McCarthy, Republican of California and the minority leader, warned on Friday that such a maneuver could tank passage of the entire package.

The Bipartisan Policy Center said that there was additional uncertainty surrounding the debt limit this year because of the pandemic and the various economic relief programs that are still ongoing.

Dec. 15 is a particularly important date because the Treasury Department is required to make a $118 billion payment to the Highway Trust Fund. If corporate tax receipts that are due that day come in weak, Treasury could face a cash crunch and the United States could be unable to meet all of its obligations, such as paying out Social Security and funding military paychecks.

The Congressional Budget Office said this week that it expected that Treasury might run out of cash by the end of December if Congress failed to act. The budget office suggested, however, that Treasury might be able to defer some Highway Trust Fund payments that were mandated in the recently passed infrastructure law, potentially staving off a default until sometime in January.

Along with its updated projection, the Bipartisan Policy Center unveiled a new proposal for dealing with the debt limit, although it is unlikely to help lawmakers this time around.

The proposal, which is being introduced by Representatives Jodey C. Arrington, Republican of Texas, and Scott Peters, Democrat of California, would establish a process giving the president authority to suspend the debt limit through the following fiscal year as long as Congress does not pass a resolution blocking the move within 30 days. The president would then have to offer a debt reduction proposal for Congress to consider separately.

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The Modernization of Estate Planning

The wealth management industry is in the midst of a technological transformation as firms look toward technology to address challenges with profit growth, changing demographics and operational efficiency.

This phenomenon is particularly noticeable in estate planning, an area long overdue for disruption that currently requires wealth managers to spend resources educating financial advisors, hiring in-house estate planning specialists, and manually converting dense documents into client presentations. Requiring this level of investment has caused many firms to reserve estate planning advice for their wealthiest clients, those who can benefit from a wider range of estate planning strategies and whose AUM justifies the costs. Yet this creates a perception that estate planning is only for the rich, despite the multitude of benefits it can provide to clients of any wealth level.

Wealthtech firms are flipping the narrative by developing solutions that democratize estate planning through artificial intelligence, design thinking and automation. Wealth managers who leverage this disruptive technology will make estate planning more accessible to a wider client base, improve the ability of financial advisors to differentiate themselves and drive future growth.  

The Current State of Estate Planning

Estate planning plays an important role within wealth management by providing an additional tool financial advisors can use to add value and build stickier client relationships. For clients, having a thoughtful estate plan in place provides many benefits including peace of mind, asset protection, and preparing future generations to inherit wealth. However, the process of providing estate planning advice is cumbersome and time-consuming.

A financial advisor must work with a client’s estate planning attorney to develop an estate plan, review the details with the client, and implement the agreed upon strategies. Once this is complete, ongoing monitoring and reporting are required to ensure that the plan continues to align with a client’s circumstances.  Over time, these plans may be challenged by difficult family dynamics, a shifting regulatory environment, or increased wealth. Financial advisors are required to stay ahead of these changes and understand their potential effects on the plan. This process requires a significant upfront and continuous investment of time by financial advisors.

Estate Planning Disruption

Innovation opens the door for the democratization of estate planning. Wealth managers who previously reserved estate planning for their wealthiest clients can use artificial intelligence and automation to begin engaging the mass affluent client segment to capture the millionaires of tomorrow. For example, a wealth manager might add an estate planning page to their client portal that allows clients to upload estate planning documents and receive automated analysis. A client that uploads their estate planning documents would consent to sharing this data with the wealth manager to enhance the level of advice they can receive. The client can then opt to meet with a financial advisor to discuss their plan or a financial advisor can proactively reach out to set up a meeting. This service would add value for clients while also providing data wealth managers can use better understand their client base.  

Estate planning technology can also improve goals-based advice by allowing advisors to provide visualizations that illustrate the alignment of an estate plan with a client’s goals. For example, a client may have a goal of gifting $1 million to their child at the end of their lifetime. Traditional goals-based wealth management technology may estimate that $500,000 invested in an equity portfolio today will allow the client to achieve this goal given their life expectancy. While the result of this analysis is financially intuitive, it fails to account for the structure of a client’s estate plan.

Today, financial advisors are required to revisit the estate planning documents to ensure the plan aligns with this financial goal. Alternatively, overlaying estate planning technology would allow the financial advisor to automatically see that the estate plan needs to be updated. This would improve their initial recommendation by suggesting that the client opens a trust to more effectively increase the probability and magnitude of wealth that can be transferred in a tax-efficient manner. By leveraging estate planning technology, financial advisors will be able to provide more holistic advice to their clients in real time.

Estate planning technology also creates opportunities to engage future generations. Estate planning attorneys recommend that clients open communication about their estate plan to prepare heirs to receive an inheritance. However, many clients may be hesitant to share the full extent of their estate plan with their children and grandchildren. Digital estate planning platforms can enable customized views of an estate plan with options to limit the information shared with heirs. This will allow financial advisors to engage future generations in estate planning discussions in a way that aligns with their clients’ wishes. These discussions provide a setting for financial advisors to build rapport with future generations and improve the ability of wealth managers to retain assets during wealth transfer events.

As much as $68 trillion in wealth will be passed down to Millennial and Gen X inheritors in the U.S. over the next 25 years. Disruptive estate planning technology will make it easier for financial advisors to prepare clients for this upcoming wealth transfer.

Vanilla, a Wealthtech startup disrupting the estate planning space, is leading the charge by creating a platform with automated estate reports, intuitive visualizations, and attorney support for financial advisors. Their technology saves financial advisors time, automates the monitoring of a client’s estate plan, and provides an accessible digital representation of the plan.

FP Alpha, another technology company focused on enabling financial advisors, has developed artificial intelligence that can interpret estate planning documents and generate plan analysis instantly. Advisors and clients can upload existing estate planning documents to generate key insights and quickly identify areas for improvement within the plan. Depending on the complexity of the estate plan, this technology could save financial advisors hours of parsing through trust and estate documents to piece together an understanding of their clients’ plans. Wealth managers who leverage this technology will increase the capacity of their financial advisors to serve more clients, while also enabling them to provide better advice.

As wealth managers prepare for an immense transition of wealth to Millennial and Gen X inheritors, effective digital strategy has become increasingly important. Currently, the estate planning practice within wealth management is a highly manual and time-intensive service offering where digitization has lagged. New technologies are disrupting estate planning through artificial intelligence, enhanced visualization of estate plans, and automated reporting. This technology will make estate planning services more accessible to the mass affluent client segment, which provides a unique opportunity for wealth managers to engage previously underserved clients who are the future of their industry.

Matthew Berkowitz is managing principal, U.S. wealth & asset management strategy practice lead, and Eden Afriat is a Senior Consultant, both at Capco.

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Ameriprise Financial, Inc. (NYSE:AMP) Receives Average Rating of “Buy” from Analysts

Shares of Ameriprise Financial, Inc. (NYSE:AMP) have earned an average recommendation of “Buy” from the ten analysts that are covering the company, Marketbeat reports. Two investment analysts have rated the stock with a hold recommendation and seven have issued a buy recommendation on the company. The average 12-month price target among brokers that have covered the stock in the last year is $292.10.

A number of research analysts recently weighed in on the company. Morgan Stanley raised their price objective on Ameriprise Financial from $305.00 to $310.00 and gave the company an “equal weight” rating in a research report on Thursday, November 18th. Royal Bank of Canada raised their price objective on Ameriprise Financial from $325.00 to $350.00 and gave the company an “outperform” rating in a research report on Friday, October 29th. Credit Suisse Group raised their price objective on Ameriprise Financial from $317.00 to $348.00 and gave the company an “outperform” rating in a research report on Tuesday, November 2nd. They noted that the move was a valuation call. Finally, Wolfe Research assumed coverage on Ameriprise Financial in a research report on Tuesday, October 12th. They set an “outperform” rating and a $328.00 price objective for the company.

Shares of NYSE:AMP opened at $290.20 on Friday. Ameriprise Financial has a 52-week low of $182.83 and a 52-week high of $312.14. The firm has a market capitalization of $32.47 billion, a P/E ratio of 15.65 and a beta of 1.65. The stock has a 50 day moving average price of $292.90 and a 200-day moving average price of $270.40. The company has a debt-to-equity ratio of 0.88, a quick ratio of 1.13 and a current ratio of 1.13.

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Ameriprise Financial (NYSE:AMP) last announced its earnings results on Monday, October 25th. The financial services provider reported $5.91 earnings per share (EPS) for the quarter, topping the consensus estimate of $5.49 by $0.42. Ameriprise Financial had a return on equity of 45.09{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and a net margin of 17.39{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. The firm had revenue of $3.50 billion during the quarter, compared to analyst estimates of $3.49 billion. During the same quarter in the prior year, the company earned $4.27 EPS. The business’s revenue was up 17.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} compared to the same quarter last year. On average, equities analysts forecast that Ameriprise Financial will post 22.27 EPS for the current fiscal year.

The firm also recently announced a quarterly dividend, which was paid on Friday, November 19th. Shareholders of record on Monday, November 8th were paid a dividend of $1.13 per share. The ex-dividend date was Friday, November 5th. This represents a $4.52 annualized dividend and a yield of 1.56{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. Ameriprise Financial’s dividend payout ratio is 24.38{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.

In related news, CEO James M. Cracchiolo sold 30,632 shares of Ameriprise Financial stock in a transaction on Friday, October 29th. The stock was sold at an average price of $303.67, for a total transaction of $9,302,019.44. The transaction was disclosed in a filing with the SEC, which is available through the SEC website. Also, CFO Walter Stanley Berman sold 15,986 shares of Ameriprise Financial stock in a transaction on Thursday, October 28th. The shares were sold at an average price of $302.37, for a total value of $4,833,686.82. The disclosure for this sale can be found here. Over the last quarter, insiders have sold 48,118 shares of company stock worth $14,597,751. Company insiders own 1.10{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of the company’s stock.

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in AMP. BlackRock Inc. raised its holdings in Ameriprise Financial by 7.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} during the second quarter. BlackRock Inc. now owns 9,616,938 shares of the financial services provider’s stock valued at $2,393,463,000 after acquiring an additional 662,711 shares during the period. Bain Capital Public Equity Management II LLC bought a new stake in Ameriprise Financial during the third quarter valued at about $137,568,000. FMR LLC raised its holdings in Ameriprise Financial by 30.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} during the second quarter. FMR LLC now owns 1,515,762 shares of the financial services provider’s stock valued at $377,243,000 after acquiring an additional 354,421 shares during the period. Amundi bought a new stake in Ameriprise Financial during the second quarter valued at about $82,602,000. Finally, AGF Investments Inc. raised its holdings in Ameriprise Financial by 154.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} during the second quarter. AGF Investments Inc. now owns 389,060 shares of the financial services provider’s stock valued at $96,829,000 after acquiring an additional 236,402 shares during the period. Institutional investors own 81.97{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of the company’s stock.

Ameriprise Financial Company Profile

Ameriprise Financial, Inc operates as a holding company. The firm provides financial planning, asset management and insurance services to individuals, businesses and institutions. It operates through the following business segments: Advice & Wealth Management, Asset Management, Retirement & Protection Solutions, and Corporate & Other.

See Also: What are the benefits of investing in REITs?

Analyst Recommendations for Ameriprise Financial (NYSE:AMP)

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest and most accurate reporting. This story was reviewed by MarketBeat’s editorial team prior to publication. Please send any questions or comments about this story to [email protected]

Should you invest $1,000 in Ameriprise Financial right now?

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MarketBeat keeps track of Wall Street’s top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on… and Ameriprise Financial wasn’t on the list.

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This should be stock market investors’ biggest concern, strategist says

Stock valuations are still looking too lofty even as the major indices continue to retrench on the one-two punch of Omicron variant fears and a hawkish shift in Federal Reserve policy.

“I worry about markets because stock market valuations look relatively high,” said Torsten Slok, Apollo Global Management chief economist, on Yahoo Finance Live. (Apollo is the parent company of Yahoo Finance.) 

Slok said the potential for interest rate hikes from the Fed in 2022 could be a headwind to markets, especially in light of valuations that aren’t too far removed from record highs. 

Added Slok, “I think the economy would still be OK [if the Fed raises rates next year], but I am actually quite worried about the vulnerabilities and the sensitivities simply because valuations are so stretched.”

Berkshire Hathaway’s Charlie Munger voiced similar concerns on Friday about stock valuations, noting they are “crazier” than the dot-com bubble. 

Indeed, air continues to be let out of what may be the near-term bubble in broader markets.

The Dow Jones Industrial Average (^DJI) fell 162 points in afternoon trading Friday, as the World Health Organization (WHO) reported the Omicron variant has now been found in 38 countries. All three major indices came under selling pressure, also not helped by a lower than expected 210,000 increase for November non-farm payrolls. 

Trading has been volatile to say the very least going back to a 1,010-point drubbing on the Dow the day after Thanksgiving.

The Dow tanked 652 points in Tuesday trading, while the Nasdaq Composite (^IXIC) and S&P 500 (^GSPC) were also deeply in the red. Tepid action persisted into Wednesday, with the Dow reversing a 520-point intraday gain to finish down 461 points. The Dow clawed back more than 600 points on Thursday in what is being seen by pros as a short-term relief rally. 

Most market pros say caution will be the name of the game right now. 

“It’s not the end of the world. These things are normal and they are healthy. But it will be a stock picker’s market, and people will have to be a lot more careful,” said Matt Maley, Miller Tabak chief markets strategist, on Yahoo Finance Live.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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