Money and Finance
- Hussman Weekly Market Comment: The Future Is Now
Link to: The Future is Now While the evidence may be alarming to some, make no mistake: The median price/revenue multiple for S&P 500 constituents is now significantly higher than at the 2000 market peak. The average price/revenue multiple across...
- Hussman Weekly Market Comment: Pushing Luck
Link to: Pushing LuckThe latest data from the NYSE shows equity margin debt at a new all-time high. Relative to GDP, the current 2.6% level was eclipsed only once – at the March 2000 market peak. In the context of the most extreme bullish sentiment...
- Hussman Weekly Market Comment: Overlooking Overvaluation
Presently, on the basis of smooth fundamentals such as revenues, book values, dividends and cyclically-adjusted earnings, the S&P 500 is somewhere between 40-70% above pre-bubble valuation norms, depending on the measure. That’s about the same point...
- Hussman Weekly Market Comment: Low-water Mark
As of Friday, our estimates of prospective return/risk for the S&P 500 have dropped to the single lowest point we’ve observed in a century of data. There is no way to view this as something other than a warning, but it’s also a warning that I...
- Hussman Weekly Market Comment: Dancing At The Edge Of A Cliff
Present market risks involve a confluence of factors. First, valuations remain unusually rich. Though prospective returns are better than at the 2000 and 2007 peaks, valuations remain more elevated than at any point prior to the late-1990's bubble,...
Money and Finance
Hussman Weekly Market Comment: Hovering With an Anvil
In July 2011, just before the market lost nearly 20% (but also the last time it corrected materially), I observed “Like Wile E. Coyote holding an anvil just past the edge of a cliff, here we are, looking down below as if there is much question about what happens next.” In my view, the stock market is hovering in what has a good chance of being seen in hindsight as the complacent lull before a period of steep losses. Meanwhile, we would require a certain amount of deterioration in stock prices, credit spreads, and employment growth to amplify our economic concerns, but even here we can say that there is little evidence of economic acceleration. Broad economic activity continues to hover at levels that have historically delineated the border of expansions and recessions.
With the S&P 500 price/revenue ratio more than twice its historical norm prior to the late 1990’s market bubble, the ratio of market capitalization to GDP also more than twice its historical norm, the most lopsided bullish sentiment in decades, an overbought market trading at a record highs – and two standard deviations above its 20-period moving averages at weekly and monthly resolutions, a “log-periodic” bubble at its most likely finite-time singularity (see Estimating the Risk of a Market Crash), bond yields well above their 6-month average, an economy where growth in real GDP, real final sales and employment are all near or below the growth rates at which historical recessions have started, and our own estimates of prospective market return/risk quite negative based on a broad ensemble of observable market conditions, we view prospective near-term and multi-year returns as strongly unfavorable, and prospective market risk as unusually elevated.
- Hussman Weekly Market Comment: The Future Is Now
Link to: The Future is Now While the evidence may be alarming to some, make no mistake: The median price/revenue multiple for S&P 500 constituents is now significantly higher than at the 2000 market peak. The average price/revenue multiple across...
- Hussman Weekly Market Comment: Pushing Luck
Link to: Pushing LuckThe latest data from the NYSE shows equity margin debt at a new all-time high. Relative to GDP, the current 2.6% level was eclipsed only once – at the March 2000 market peak. In the context of the most extreme bullish sentiment...
- Hussman Weekly Market Comment: Overlooking Overvaluation
Presently, on the basis of smooth fundamentals such as revenues, book values, dividends and cyclically-adjusted earnings, the S&P 500 is somewhere between 40-70% above pre-bubble valuation norms, depending on the measure. That’s about the same point...
- Hussman Weekly Market Comment: Low-water Mark
As of Friday, our estimates of prospective return/risk for the S&P 500 have dropped to the single lowest point we’ve observed in a century of data. There is no way to view this as something other than a warning, but it’s also a warning that I...
- Hussman Weekly Market Comment: Dancing At The Edge Of A Cliff
Present market risks involve a confluence of factors. First, valuations remain unusually rich. Though prospective returns are better than at the 2000 and 2007 peaks, valuations remain more elevated than at any point prior to the late-1990's bubble,...