Englund

Stock markets are not only ignoring the obvious threats, but seem imbued with extreme optimism. In the autumn of 1929, Irving Fisher, one of the greatest American economists, stated: “Stock prices have reached what looks like a permanently high plateau.”  This turned out to be one of the most incorrect forecasts ever made: in short order, US and global stock markets were hit by the Great Crash, which was followed by the Great Depression. Maybe markets were in some sense “right” before the crash and wrong after it. But who cared? For investors and the hundreds of millions of people across the world whose lives were upended by the disaster, the gods of the stock market had failed for a generation. Why might this story be relevant today? The answer is that the valuation of US stocks is even higher today than in September 1929.  The first global financial crisis after the disaster of the 1930s in 2007-09: the easy monetary — and relaxed regulatory — policies adopted after the stoc...

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://ww...

The current bull market has seen outsized returns for many years, with US equities having gained more than 100 per cent since October 2022.  While there were shortlived pullbacks in 2022 and in the pandemic, there has been an overall 10-fold increase since the end of the financial crisis in 2009. The enthusiasm for US equities has pushed valuations into extreme territory. The market is valued on 28.4 times trailing earnings, 40 per cent above the average of the past 40 years.  Every major bull market peak of the past 125 years was preceded by a sharp rise in policy rates.  For this bull market to come to an end, the momentum of the AI “bubble” will have to burst.  For now, it is likely that this AI-driven bull market will probably persist.  Ian Harnett Financial Times 1 July 2026 https://www.ft.com/content/19fa80bb-1c8e-44ac-bfba-ba8da321be6d?syn-25a6b1a6=1 The writer is co-founder and chief investment strategist at Absolute Strategy Research   When the tim...

There are two significant reasons earnings expectations have soared—and they are both probably temporary. It’s six months, give or take, since AI excitement drove stock valuations above their 2020 bubble high to reach the highest since 2000, the peak of the dot-com bubble. Something odd has happened since: Valuations, measured as the price-to-earnings or PE ratio, have plunged, while stocks rose to a record high this week. This isn’t just unusual. It is unprecedented in data back to 1985. There are two big reasons earnings expectations have soared. The first is that microchip prices have soared because of huge artificial-intelligence demand.  The second is the war in Iran, which has given energy companies a huge boost. The question for investors: Do the stocks, that have benefited from these one-off boosts, really offer better value now? James Mackintosh Bloomberg 18 April 2026 https://www.wsj.com/finance/stocks/the-record-stock-market-rests-on-some-big-one-offs-7e7a2500

The S&P 500 trades at about 21.4 times blended forward 12 months’ earnings, down from 23 times earnings in late October, which is a net positive for long-term investors with diversified portfolios. That’s no bargain, yet it’s healthy to see the ceaseless expansion of multiples finally taking a breather .  Since the release of ChatGPT in November 2022, the S&P 500 market-multiple has increased by a whole number roughly every six months; we were all sleepwalking toward 1999-like valuations and poised to get there as soon as late 2026. Jonathan Levin Bloomberg February 23, 2026 https://www.bloomberg.com/opinion/articles/2026-02-23/the-ai-scare-trade-is-heathy-for-the-stock-market  

Dessutom har analytikerkåren redan nu skruvat ned sina vinstförväntningar på de svenska börsbolagens 2026  För svensk del är den starka kronan en starkt bidragande effekt. Analytikernas förhoppningar om en snabb vändning fortsätter att grusas, och vi tvingas inse att vägen tillbaka till de riktigt glada dagarna på börsen ser ut att bli längre än vad vi tidigare hoppats på.  Skulle rapporterna dessutom komma in svagare än de redan nedreviderade förväntningar bör börsen fundera om värderingen, som befinner sig över historiskt snitt, verkligen är motiverad.  Robert Andersson DI 21 januari 2026 https://www.di.se/analys/analytikernas-harda-dom-vinsterna-blir-lagre-an-vantat/  

Permabear Albert Edwards at Société Générale says he still believes US stocks are in a valuation bubble that will drag down the economy when it collapses.  But even he notes that “I struggle to see an imminent macro trigger for a major bear market”. The overwhelming optimism means small slip-ups can produce painful volatility. Katie Martin FT 17 December 2025 https://www.ft.com/content/494676c5-d499-455e-b38a-a5fe02ba0ac8   Société Générale’s Albert Edwards has taken things one step further, warning that an ”everything bubble” appeared to be taking shape in the U.S. and pointing to stocks and housing as especially exposed. However, Edwards has been warning about a bubble for some time. https://englundmacro.blogspot.com/2025/07/b-ordet-ater-b-som-i-bubbla.html What makes a Minsky moment? The term refers to the end stage of a prolonged period of economic prosperity that has encouraged investors to take on excessive risk, to the point where lending exceeds what borrowers can pay ...

  MarketWatch 10 november 2025 https://www.marketwatch.com/story/by-one-measure-the-bull-market-is-16-years-old-heres-why-investors-face-a-challenging-decade-ahead-f6a668c9

Investors expect the Federal Reserve to cut its policy rate on Oct. 29, and once more by the end of the year, but the case for cutting is weak. Core consumer-price inflation remains well above the central bank's target, and unemployment is still in line with the bank's mandate of "maximum employment". The Fed would be wiser to pause due to enormous uncertainty about where the economy is headed, with the inflation outlook and labor market trends being equally murky. Bloomberg Editorial Board October 28, 2025 https://www.bloomberg.com/opinion/articles/2025-10-28/federal-reserve-should-pause-in-cutting-interest-rates John Authers Bloomberg  October 29, 2025 https://www.bloomberg.com/opinion/newsletters/2025-10-29/record-stock-prices-aren-t-the-result-of-politics The stock market more overvalued than at almost any time in U.S. history https://englundmacro.blogspot.com/2025/10/this-bull-market-has-no-support-this.html  

The stock market is more overvalued than at almost any time in U.S. history — by virtually every measure. The fact that corporate profits are strong and growing doesn’t mean the stock market isn’t in a bubble.  That’s worth emphasizing because many of Wall Street’s cheerleaders are arguing we can’t be in a bubble if corporations are as profitable as they are.  The same message is being told by virtually all valuation measures with statistically significant track records when forecasting the stock market’s future returns.  The bulls have no real support for this bull market other than “this time is different.”  Those are the four most dangerous words on Wall Street. Mark Hulbert MarketWatch 27 October 2025 https://www.marketwatch.com/story/the-stock-market-is-more-overvalued-than-at-almost-any-time-in-u-s-history-by-virtually-any-measure-2291e264   Margin debt is at a record high $1.13 trillion 1.130 miljarder dollar, typ 10.000 miljarder kronor. https://englundm...

Vad hände nu då? Slagläge för dipbuyers? Stämningen kom av sig i New York – regionalbanker tyngde Oron för dåliga lån hos amerikanska regionalbanker kopplade greppet om marknaden på torsdagskvällen, och Wall Street-indexen gick från plus till minus. https://www.di.se/live/stamningen-kom-av-sig-i-new-york-regionalbanker-tyngde/ Nu öppnar Ulf Kristersson för att åter ta upp debatten om euron; statskupp? https://englundmacro.blogspot.com/2025/10/nu-oppnar-ulf-kristersson-for-att-ater.html Amorteringslättnader; kritik från tunga myndigheter Konjunkturinstitutet som säger nej till höjt bolånetak.  ”Är det klokt att låta den som vill vinna budgivningen för en bostad låna 10 gånger mer än hushållets bruttoinkomst?” Regeringen vill hjälpa unga in på bostadsmarknaden genom att göra det lättare att låna Investor substansvärde över 1.000 miljarder kronor. https://englundmacro.blogspot.com/2025/10/investor-substansvarde-over-1000.html Jo, en del hade kunnat göras annorlunda. Riksbanken kunde h...

  Such milestones affect nothing and should have no psychological impact, but they do. On more foundational grounds, the most widely watched long-term stock metric is the CAPE (cyclically adjusted price/earnings) multiple, popularized by the Yale University economist Robert Shiller. Another metric, espoused by Alan Greenspan when he chaired the Federal Reserve, compares the earnings yield (the inverse of the p/e ratio) with the 10-year yield.  For two decades, stocks yielded more than bonds, making asset allocation easy. There Was No Alternative to stocks. Now there is. The 10-year is yielding more. It’s not clear that there’s a bubble in share prices, although they’re certainly not cheap.  There might well be a bubble in the amount people are prepared to spend on AI, in the earnings that the Magnificents make on the back of that, and in projected earnings for the future.  That is where trouble could arise. John Authers Bloomberg September 30, 2025 https://www.bloomb...

US equities today account for more than 60pc of the value of global equities as a whole, up from around 40pc 15 years ago. Granted, the US continues to grow more strongly than much of the rest of the industrialised world and it enjoys a commanding lead in many of the technologies of the future. Virtually all investment observers of any longevity seem to share this view, but few are yet brave enough to stick their necks out and call the top. NOBODY KNOWS ANYTHING Instead, they talk of equity markets being “priced to perfection”, by which they mean there is little or no room for mishaps.  Goldman Sachs strategist says stocks are priced for perfection The stock market is at the same valuation as when Greenspan made his ‘irrational exuberance’ comment https://englundmacro.blogspot.com/2025/01/most-people-assume-that-s-500-index.html Fear of missing out, or Fomo,  https://englundmacro.blogspot.com/2025/09/crash-of-1929-it-was-fomo-plus-debt-its.html further drives the stampede towa...

Det skrev Wall Street Journal i en artikel på söndagen. Investerare betalar nu mer än någonsin för varje intäktskrona som aktierna i indexet S&P 500 producerar. Torsdagens värderingsmultipel vid 3,23 gånger försäljningen är ett rekord När det gäller indexkoncentration kan konstateras att de tio största bolagen i S&P 500 stod för 39,5 procent av indexets värde i slutet av juli månad, vilket är en rekordandel.  Nio av dessa bolag värderas till minst 1.000 miljarder dollar. DI 1 september 2025 https://www.di.se/live/usa-aktier-dyrare-an-under-it-boomen/ U.S. Stocks Are Now Pricier Than They Were in the Dot-Com Era The S&P 500 has never been this expensive, or more concentrated in fewer companies He is skeptical that the biggest companies can maintain current valuations long term. “At one point or another valuations tend to matter, and the expectations baked into those valuations matter, and those expectations are getting to be so dramatic it will be very hard to meet them,...

Shares are surging because investors think that they can’t go down, and that’s a dangerous assumption. The safety record of zeppelins was relatively unimpeachable prior to the Hindenburg. In markets too, the most painful selloffs tend to involve things that people erroneously assume to be absolutely secure. While valuation Cassandras tend to focus on the pricy multiples of artificial intelligence stocks, Walmart and Costco actually trade at richer blended forward price-earnings ratios (47 times and 34.3 times, respectively) than Nvidia Corp. (34 times) In slightly oversimplified terms, investors are willing to pay more per dollar of next year’s earnings than they’re willing to pay for a supposedly risk-free two-year Treasury note with government-guaranteed coupons. These stocks are surging because investors believe that they can’t go down! And paradoxically, that now puts them at a heightened risk of correction. A return to those previous 10-year average multiples would imply a 39% dro...

Futures traders now think a Federal Reserve rate cut is a slam dunk next month, something usually good for stocks when it isn’t due to weaker growth.   Private-sector job creation has stalled, with the report showing this infuriating the president so much he fired the head of the Bureau of Labor Statistics, which also produces the inflation figures. A move toward mild stagflation is far from certain. But the data suggest it is absolutely a risk, and it is even visible in Wall Street earnings forecasts, if you squint.  It just doesn’t show up in stock prices. The consensus for S&P 500 earnings in 12 months is 6% higher than at the start of the year.  But earnings upgrades have been heavily skewed toward three successful sectors: tech, communication services (where Meta and Alphabet sit) and financials.   One plausible explanation: The artificial-intelligence boom and data-center construction is hiding pain in other areas. That’s not a great foundation for re...

If you’re feeling FOMO, envy and greed about record stock prices, you’re not alone. That’s how market bubbles form. Investors are seeing stock-market bubbles everywhere.    A market bubble can materialize even when most investors are worried about one. Like now. A recent Bank of America fund-manager survey found that a record 91% of survey participants believe the stock market is overvalued, and  Google Trends shows a sizable increase in recent weeks in the number of finance-related searches focusing on bubbles  In his 2000 book “Irrational Exuberance,” Shiller wrote that a bubble is self-perpetuating:  “News of price increases spurs investor enthusiasm, which spreads by psychological contagion from person to person, in the process amplifying stories that might justify the price increases and bringing in a larger and larger class of investors.” Shiller added that these newcomers, “despite doubts about the real value of an investment, are drawn to it partly throu...

  There has been a generational change among investors. Fewer remember calamities such as the dot-com downturn or even the financial crisis.  Stagflation https://englundmacro.blogspot.com/2025/08/trumps-incipient-stagflation.html Instead, the current crop of young investors have known mostly blue skies since they opened their first brokerage accounts. They came of age during a time of superlow interest rates when markets moved only higher over time. For many Wall Streets pros, this is yet another sign of froth at a time when stocks, especially the biggest tech names, are historically expensive. The meme-stock trades are rekindling memories of the dot-com boom. But the resilience of individual investors may signal something more than just misplaced optimism. Their willingness to stick with stocks may be more enduring than many veterans realize.  Gunjan Banerji Wall Street Journal 11 August 2025 https://www.wsj.com/finance/stocks/a-new-generation-of-buy-the-dip-investors-is...

  Palantir’s stock is expensive, but that hasn’t stopped the S&P 500’s top performer from adding to its huge gains Analysts said Palantir shares were expensive last year as well, but the shares closed out 2024 up about 340%.  Palantir’s stock was the top performer in the S&P 500 last year. Brent Thill of Jefferies took a harsher view on the valuation, saying that it’s “disconnected from even optimistic growth scenarios” with Palantir shares trading at 74 times estimated 2026 revenue  RPT revenue.  MarketWatch 5 August 2025 https://www.marketwatch.com/story/palantir-skeptics-double-down-on-a-concern-that-investors-have-been-better-off-ignoring-70f85bee In early 2023, Palantir Chief Executive Alex Karp publicly announced the company had a new artificial-intelligence product that was “currently under development.” Palantir engineers were stunned. They weren’t building any such product.  His engineers, he assumed, would figure out how to build it.  They...

  developed by Yale economist Robert Shiller, topped 38 in late July,  better known as the CAPE ratio — showed the S&P 500 had reached its priciest point since late 2021. MarketWatch 6 August 2025 https://www.marketwatch.com/story/stocks-are-sinking-and-these-4-charts-suggest-a-deeper-drop-might-be-just-getting-started-05a5e56a