The world population is growing older. That’s bad news for the stock market.

Economists are warning that Europe’s aging population could drive a slowdown in growth on the continent.

The aging of the world population is expected to accelerate in the coming decades, which will likely produce bad outcomes for the stock market, JPMorgan strategists say.

The strategists say that historically, an older population has led to declining returns, lower earnings growth, and weaker valuations.

Over a 10-year period, a 1% increase in the number of people over 65 is correlated with a 0.92% decline in annual stock returns, the strategists calculated in a report released last week.

They point mainly to slower growth and falling valuations.

With an older investor base looking to save for retirement, investment capital declines, leading to less innovation. That, plus slower growth in the workforce, will have a negative impact on earnings growth, the strategists say.

“Domestic population aging may reduce earnings growth for several reasons. It leads to slower workforce growth, reducing domestic economic growth. There is also evidence that aging can reduce innovation and productivity growth,” the strategists said.

That’s especially true for companies that derive revenue from international operations, the strategists say.

“For companies that derive more of their revenue from abroad, like multinationals, global population aging (in a GDP-weighted sense) is likely to be more consequential for earnings growth than local population aging,” the strategists wrote.

That means equity market indexes with small and mid-caps will likely see more impact from local population aging than those with exclusively large caps.

Valuations will also take a hit, the strategists said. As the elderly empty their retirement funds, national savings decline, thus raising bond yields. Older populations also pull out of the market at higher rates, driving down stock prices.

Those trends, plus lower earnings growth expectations, justify lower valuations, the strategists say.

The strategists say there’s one bright spot, though. That’s healthcare, which older populations tend to spend more on.

“We find a clear positive relationship between aging and excess returns on the sector, driven entirely by faster earnings growth,” the strategists said.

A 1% increase in the population share of those over 65 will lead to a 0.85% increase in health care returns over a 10-year period, the strategists say.

The strategists note, too, that the populating aging trend won’t impact countries equally. In China, the elderly share of the population is set to increase by seven percentage points in the next decade. The US, meanwhile, will see a more moderate rise from 18.1% to 21.5%.

Past reports have also warned of the aging population’s impact on the economy.

Earlier this year, Barclays economist Jonathan Millar said boomers, a historically large generation, are approaching “peak burden” on the US economy in the next few years.

Meanwhile, a larger share of people over 55% owning stocks in the US may be a downside risk to the market, as older investors often don’t have the luxury of holding through a downturn and could exacerbate volatility by selling during market pullbacks.