The strongest argument against a market crash is right here.
The S&P 500's PEG ratio has fallen to 0.70 — its lowest level since 1995 and far below the levels reached around previous bear markets: 2.0 in 2000, 1.6 in 2007, 2.4 in 2020, and 2.0 in 2022.
The PEG ratio compares the market's price-to-earnings multiple with expected earnings growth. A falling ratio means investors are paying less for every percentage point of projected profit growth.
Stocks haven't become cheap because prices collapsed. They look cheaper because corporate earnings are growing faster than stock prices.
The S&P 500 trades at roughly 19x forward earnings, down from 22x at the beginning of 2025 and slightly below its 10-year average. Meanwhile, earnings are expected to grow around 32% for the full year.
Third-quarter earnings are projected to rise 29.5%, marking a potential third consecutive quarter above 25%. Analysts have also raised that forecast from 26.7% at the beginning of the quarter.
This rally is being supported by rising profits, not investors simply paying higher multiples.
How could you not stay bullish after seeing this? 📈
The S&P 500's PEG ratio has fallen to 0.70 — its lowest level since 1995 and far below the levels reached around previous bear markets: 2.0 in 2000, 1.6 in 2007, 2.4 in 2020, and 2.0 in 2022.
The PEG ratio compares the market's price-to-earnings multiple with expected earnings growth. A falling ratio means investors are paying less for every percentage point of projected profit growth.
Stocks haven't become cheap because prices collapsed. They look cheaper because corporate earnings are growing faster than stock prices.
The S&P 500 trades at roughly 19x forward earnings, down from 22x at the beginning of 2025 and slightly below its 10-year average. Meanwhile, earnings are expected to grow around 32% for the full year.
Third-quarter earnings are projected to rise 29.5%, marking a potential third consecutive quarter above 25%. Analysts have also raised that forecast from 26.7% at the beginning of the quarter.
This rally is being supported by rising profits, not investors simply paying higher multiples.
How could you not stay bullish after seeing this? 📈
