Economics
Valuation Charts All Over Map and That’s a Problem for Stocks
- Fed model shows S&P 500 looks attractive relative to bonds
- When future growth is considered, bull case is less certain
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There has never been a bull market in stocks that lasted as long as this one. A big reason it’s a week shy of its 11th anniversary has been that at every critical juncture, all those moments when a wave of panic seemed set to engulf the market, the buy-the-dip crowd came to the rescue, snapping up shares and turning the rout into a rebound.
Those buyers were driven by an unwavering belief in the earnings power of U.S. companies and a conviction that when valuations — expected earnings divided by share price — got cheap, they had to buy.