A few weeks ago, where the S&P 500 achieved new records, this report Big, big The number that you rarely see by the Wall Street analysts, who prefer to cite with less and more marketing profits based on the profits of “next year” (always excessive) or “operational profits” that exclude real fees such as interest expenses.
But now in record notebooks: at 2:35 pm on August 28, the S&P has achieved another new summit in 6501, and the real PE, which did not retreat from PE 30. This percentage is based on what matters more, profits of the principles of accounting generally accepted over the past four four, which have already occurred in contrast to the usual excess predictions. The only period in recent decades in which large CAP shares have been expensive: ten quarters during the technological fiction that spanned from the fourth quarter of 1999 to the first quarter of 2022. (PE also exceeded 30 during the epidemic and after GFC, but only because the profits collapsed, Qasim was drowned the low amount.)
As I indicated, on the total scene, signs of risk are multiplied. The latest employment report from the Labor Statistics Office revealed that the United States added 73,000 small jobs in July, and the May and June numbers were radically revised, which led to a total net recruitment during the past three months to only 106,000, less than the fourth increase for the same period last year. Heather Long, the chief economist in Federal Maritime Credit UnionAnd describing weak data as a “changing games” that shows that “the labor market is deteriorating quickly.”
GDP growth also has also proven disappointing, as he scored much less than the Tram’s very ambitious target by 3 %. The economy expanded in an annual clip by only 1.75 % during the first half of 2025, as it decreased from an average of 2.7 % in the third and Q4 quarter of last year. The CBO budget office expects lukewarm expansion from 1.7 % to 1.8 % from 2026 to 2035, and is almost not quickly enough Reducing the federal religion The agency’s projects will be enlarged from 100 % national income this year to 110 % by 2031.
So what does that mean for investors now? A 30 PE means that you only get $ 3 of profits for every $ 100 you pay for the S&P shares. Recently, in late 2022, you were getting $ 5 for every $ 100 invested. The jump did not occur in stock prices because the profits rose. Since then, they hardly coincide with inflation. No, the huge slope came in recent years strictly because PES jumped, making the stocks more expensive. This does not mean that the stocks will be disrupted tomorrow, next week or next month. But history has proven repeatedly that when the assessments rise to this extent in the stratosfire, they must eventually return to Earth.
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