MarketPR
The S&P 500 Shiller CAPE Ratio has climbed above 40x, reaching its highest level since the dot-com bubble period, a valuation metric that signals potential market overextension similar to the late 1990s.
This indicator, which functions as a price-to-earnings ratio for the S&P 500 by smoothing earnings over a 10-year period and adjusting for inflation, previously hit an all-time high of roughly 44x when the dot-com bubble burst.
Market breadth data reinforces these valuation concerns. In recent trading sessions, more stocks have hit 52-week lows than 52-week highs, a pattern that occurred just before the dot-com bubble collapsed.
This divergence has appeared even on days when the S&P 500 index has risen, suggesting underlying weakness despite headline index gains.
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