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(6,104 posts)
Tue Aug 11, 2020, 07:44 AM Aug 2020

Stock market futures sky high again today!

S&P Futures
Dow Futures
Nasdaq Futures
Russell 2000 Futures

Price earnings ratio based on average inflation-adjusted earnings from the previous 10 years, known as the Cyclically Adjusted PE Ratio (CAPE Ratio),
is now at 31.08.

Just before 1929 crash the highest it reached was 30.0 I expect a catastrophic market crash coming up, no idea when.


(14,674 posts)
1. January 21, 2021 of course.
Tue Aug 11, 2020, 07:50 AM
Aug 2020

Ugh. Trump is setting up Biden for the biggest mess in history. This will make W’s mess for President Obama look like “swatting a fly”.


(82,003 posts)
2. Laundering taxpayer $$$...
Tue Aug 11, 2020, 07:52 AM
Aug 2020

Converting it to stock market gains. It's our $$ floated to prop up the market to keep -45 from having a hissy fit and put our money in the enablers' pockets.


(6,104 posts)
3. Even a 3rd grader can understand this chart------
Tue Aug 11, 2020, 07:56 AM
Aug 2020

It is not tax payer dollars, because economy is worse than March 2020. It is the printing press operated by FED.


(10,837 posts)
6. Personal income was up 7.3% in the 2nd quarter, and up 10.1% over Q2 2019
Tue Aug 11, 2020, 08:05 AM
Aug 2020

far in excess of inflation and population growth. A very substantial real increase.

Details of the graph's and numbers' sources are in post#9 in another Econ Group thread

Result: market back up.

Despite a nose-dive in earnings:

Q1 S&P 500 Earnings per share:
2017 Q1: 27.46,
2018 Q1: 33.02,
2019 Q1: 35.02,
2020 Q1: 11.88 👀 😲

We don't have the full Q2 earnings yet. But likely to be a lot worse, given that Q1 GDP declined by 5%, and Q2 GDP declined by 32.9% (both on an annualized rate basis. The actual GDP drops were Q1: 1.3%, Q2: 9.5%). So it would be pretty much impossible for Q2 earnings to be anything but a lot worse than Q1 earnings.


(6,104 posts)
8. Without gov't support personal income was DOWN 6.1%
Tue Aug 11, 2020, 08:15 AM
Aug 2020

according to your chart. I got stimulus check which I did not need.
Laid off workers received $600/Week additional besides state benefits. Many got more money than their wages.
So of course personal income was inflated. What happens when gov't reduces printing money?


(10,837 posts)
10. "What happens when gov't reduces printing money?" - the deep 33.9% dive of the S&P 500
Tue Aug 11, 2020, 08:22 AM
Aug 2020

from February 19 to March 23 might provide a hint ...


(4,845 posts)
4. well, if the stock market is at under 20k, his approval rating would crash like Bush
Tue Aug 11, 2020, 08:01 AM
Aug 2020

And his only "economy" message is gone. Republicans can't let that happen.


(10,837 posts)
11. Isn't the earnings denominator in CAPE an inflation-adjusted average of past 10 years?
Tue Aug 11, 2020, 08:39 AM
Aug 2020

Hasn't the CAPE been above 1929 levels for a few years now? Anyway, since it's an average of 10 years (40 quarters), it is pretty insensitive to change, such as the one disastrous quarter so far (Q1).

What worries me is earnings now: Q1 2020, which are down 66% from Q1 2019, with Q2 looking like it's going to be way worse (given that the GDP decline in Q2 was much more severe than in Q1), post#6 bottom


(10,837 posts)
15. Strange that I didn't find this. I Googled and found some versions that were a couple years old at
Tue Aug 11, 2020, 12:31 PM
Aug 2020

least. Won't use that search phrase again (I searched for "CAPE ratio graph" or something like that, DUH) . Thanks for the link . You're right (ooops I should say "correct" not "right" )

Here's monthly plain old P/E that goes from early 1928 to June 2020


Selecting the 5 year graph:

I'm surprised at the January 2020 peak (wouldn't the P/E be a heck of a lot higher than that in June with earnings so far down, and S&P 500 in June just a little below January's levels?)

In January, the S&P 500 ranged between 3225-3329
In June the S&P 500 ranged between 3002-3232
(based on the daily closing prices)
Must be the same "E" in January as in June in this graph?


(10,837 posts)
12. Stimulus, vaccine hopes, and now Caligula says is considering a cap gains tax cut
Tue Aug 11, 2020, 09:09 AM
Aug 2020
Stock market news live updates: Stocks rise, Dow adds 300+ points amid vaccine, stimulus optimism, 8/11/20

Stocks mostly rose Tuesday, with the S&P 500 closing in on a record level as hopes for a vaccine and further stimulus spurred a global risk rally and a pop in “reopening” stocks. The Nasdaq underperformed again as shares of Big Tech names Facebook (FB), Amazon (AMZN) and Netflix (NFLX) extended Monday’s losses and gave back some of their sharp year-to-date gains.

Russia’s President Vladimir Putin said Tuesday that Russia became the first country globally to give regulatory approval to a Covid-19 vaccine, ...

... "some names in the Nasdaq – in particular, cloud and some other areas like stay-at-home stocks, are pretty egregiously expensive. Some of these names are a 1000x earnings, 50x cash flow.

[blah blah Trump's stimulus orders blah blah]

During remarks late Monday, Trump added that he was considering a capital gains tax cut.

10:06 AM ET: Dow up 298 (+1.07%), S&P 500 up 6 (+0.17%), Nasdaq down 85 (-0.76%)
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