Source: Wall Street See
Goldman Sachs pointed out that the last time the S&P 500 index fell by more than 2% in a single day was in December 2022. Since then, the US stock market has been on an overall upward trend and has continued for 376 days. Moreover, the US stock market is not currently in an 'overvalued' state, with the P/E ratio of the top 10 market cap stocks in the S&P 500 index being about 30 times, compared to about 47 times during the peak of the 2000 internet-related bubble.
How long has it been since there has been a decent correction in the US stock market?
On Tuesday, the S&P 500 index, together with the Nasdaq index, reached new highs and the momentum of the US stock market's continuous rise is unstoppable. The recent string of record highs has led people to believe that the US stock market may not see a decent correction.
Goldman Sachs trader Brian Garrett pointed out that the last time the S&P 500 index fell more than 2% in a single day was in December 2022. Since then, the US stock market has been in an overall upward trend, which has lasted for 376 days, the longest rising time in the post-financial crisis era, even exceeding the 351 trading days as of February 2, 2018.
Garrett believes that the current upward trend in the US stock market will continue for a longer period of time, because Goldman Sachs chief economist Jan Hatzius has previously pointed out: "The decline in inflation and expectations of future interest rate cuts still support asset prices."
So is the valuation of the US stock market high?
Goldman Sachs analyst Peter Callahan pointed out that the US stock market is currently not in a 'overvalued' state, because the price-to-earnings ratio of the top ten market capitalization stocks in the S&P 500 is about 30 times, while in the peak of the dot-com bubble in 2000, the price-to-earnings ratio of the top ten stocks was about 47 times. If the top ten stocks are excluded, the overall price-to-earnings ratio of the S&P 500 index is only 18 times. Therefore, as long as the US stock market maintains its current upward trend, it still has the potential to continue to rise.
Editor / jayden