Price: Price Increase

price: Is the price increase justified, or are we witnessing a bubble One might think the increase is justified, given that real quarterly S&P 500 reported earnings per share rose 3.8-fold over essentially the same period, from the first quarter of 2009 to the second quarter of 2018, according to The Guardian. In fact, the price increase was a little less than equal to earnings. This makes the US stock market the most expensive in the world, according to the cyclically adjusted price-to-earnings CAPE ratio that I have long advocated. Of course, 2008 was an unusual year. But it is important to bear in mind that earnings are highly volatile. What if we measure earnings growth not from 2008, but from the beginning of the Trump administration, in January 2017 Donald Trump's currency confusion continues Jeffrey Frankel Read more Over that 20-month interval, real monthly US stock prices rose 24%. From the first quarter of 2017 to the second quarter of 2018, real earnings increased almost as much, by 20%. With prices and earnings moving together on a nearly one-for-one basis, one might conclude that the US stock market is behaving sensibly, simply reflecting the US economy's growing strength. (news.financializer.com). As reported in the news.