The S&P 500’s ratio relative to M2 money supply just nudged above the level of the 2000 internet bubble peak. This is an intuitive yardstick for how expensive valuations have become.
The last time it reached this point, Nasdaq took fifteen years to regain lost ground.
But this time there’s a different variable. M2 itself is re-expanding, the liquidity pool is getting bigger, so a rising ratio doesn’t necessarily signal bubble conditions. In expensive U.S. stocks, money still needs somewhere to go. Scarce assets with a fixed total supply are naturally candidates for this repricing.
When valuations hit extreme levels, markets can sometimes keep running a bit longer. Still, history is there, and at this point the margin for error is very low.
#标普500 #M2 #valuation
The last time it reached this point, Nasdaq took fifteen years to regain lost ground.
But this time there’s a different variable. M2 itself is re-expanding, the liquidity pool is getting bigger, so a rising ratio doesn’t necessarily signal bubble conditions. In expensive U.S. stocks, money still needs somewhere to go. Scarce assets with a fixed total supply are naturally candidates for this repricing.
When valuations hit extreme levels, markets can sometimes keep running a bit longer. Still, history is there, and at this point the margin for error is very low.
#标普500 #M2 #valuation
