He cites high valuations and poor market breadth. thinks labels like"bull market" are overrated.
It also doesn't offer a fair characterization of the entire S&P 500's performance. Under the surface of the index's headline number, the current rally is being driven by several big tech stocks in the artificial intelligence game.
Let's start with valuations. Hussman's preferred valuation measure is total market cap of non-financial stocks to total revenue of non-financial stocks. The measure sits above levels seen during the dot-com bubble over two decades ago. Here's a more common valuation measure, the Shiller cyclically adjusted price-to-earnings ratio. While it's off of recent highs, it's still historically elevated and currently sits near levels seen in 1929.
His call stems from simply how far stocks would mathematically have to fall to return to valuation levels where one could historically expect 10% annual returns, based on his preferred measure mentioned above.
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