Image Source: Pixabay

From our friends are Current Market Valuations, three interesting charts for you.

The first is the Price/Sales Ratio, which remains nearly two standard deviations above the norm. Over the entire course of American financial history, it has rarely been this elevated.

Next, we have the S&P 500 Reversion to the Mean. There have been eras, such as the peak of the Internet bubble and the peak of the Housing bubble, when we were at this level (again, two ST above the norm). You may notice the word “bubble” keeps showing up, particularly since we’re in the Everything bubble right now, dwarfing all before

The real eye-popper is Economic Uncertainty, which has absolutely busted above all prior history. Now that the U.S. has utterly surrendered its laughable Liberation Day nonsense (remember the giant poster board with the triple-digit tariffs?), this uncertainty has collapsed to a level here that is merely equal to the PEAK terror of Covid-19. So that’s a big victory, I suppose.

The point remains the same: equity prices are bonkers. I can’t help but think that decades of people shoving trillions into their 401k accounts are responsible for almost all the rise (with the balance being attributed to corporate buybacks of trillions more, which should be illegal, like it was until 1982). Were it not for these factors, the S&P would probably be worth about 200 or so.

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