[Marxism] Fwd: Share prices, profits and debt | Michael Roberts Blog
lnp3 at panix.com
Mon Feb 6 05:42:55 MST 2017
Michael Lewitt points out that stock markets “are chasing the highest
valuations in history.” As the graph below shows, they still have some
way to go to match the hi-tech bubble excess of 2000. But the US stock
market is now at the same level of valuation as just before the 1929 crash.
And yet financial markets are not supported by strong corporate earnings
and real GDP growth. According to Factset, estimated non- GAAP earnings
growth for S&P companies in 2016 was a paltry +0.1% (and GAAP earnings
growth was negative). Revenues were up roughly 2.0%. “Wall Street
strategists trying to tempt investors into buying more stocks at these
levels are playing with fire.” (Casey).
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