[Marxism] Fwd: Share prices, profits and debt | Michael Roberts Blog

Louis Proyect 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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