Stock prices are experiencing volatility, with the S&P 500 futures fluctuating by up to 100 points in a single day. This trend is raising concerns about stock valuations, particularly if economic policy uncertainty and corporate earnings decline. Research indicates that relationships between earnings, inflation, and the money supply reveal elevated market exuberance.
The current choppy market environment may be a sign of overvaluation. If the economy deteriorates and corporate earnings are negatively impacted, investors may view stocks more cautiously. This could lead to a decrease in stock prices, making now an opportune time for value investing.
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Source: https://www.marketwatch.com/story/as-stocks-wobble-these-two-rarely-noticed-measures-say-valuations-are-stretched-61471820