The stock market’s double bubble. A price bubble on top of an earnings bubble.

Panmure Liberum analysts said the S&P 500 is valued at 41 times earnings under the Shiller CAPE ratio, near the record high of the dot-com era.

BCA Research chief strategist Peter Berezin warned that once an earnings bubble peaks, stocks could fall between 30% and 50%.

If you ask a bull to list three reasons why stocks aren’t in a bubble right now, they’re bound to bring up the forward price-to-earnings ratio.

Analysts like to compare the price of a stock with the amount of earnings per share the company is expected to earn over the next 12 months. 

While stock prices have soared lately, Wall Street earnings estimates have been rising even more quickly.

If one were to adjust recent earnings to account for a more normal pace of growth, the Shiller CAPE ratio would swell to 67.6, or 4.6 standard deviations above the long-term trend. 

This would surpass the peak of every other asset bubble in U.S. history, the analysts wrote.

Joseph Adinolfi MarketWatch 6 July 2026

https://www.marketwatch.com/story/if-the-stock-markets-double-bubble-bursts-it-could-usher-in-the-next-crash-de54c1b2


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