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The S&P 500 reached a cyclically adjusted price-to-earnings (CAPE) ratio of 41.07, the second-highest valuation in 156 years of market history, according to data from Robert Shiller's historical dataset.
Only November 1999, when the ratio peaked at 44.19, recorded a higher reading.
This valuation level coincides with a record-high margin debt figure, creating a dual warning signal that has not appeared simultaneously in over a century and a half.
Developed by Nobel Prize-winning economist Robert Shiller, the CAPE ratio measures stock prices against 10 years of inflation-adjusted earnings to smooth out temporary economic fluctuations.
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