Odaily Planet Daily reported that the US stock market will rise against the trend in 2025, only one line away from the historical high. However, the higher the S&P 500 index, the more people are worried about the foam of its valuation multiple. The data shows that the price to earnings ratio of the index, calculated based on expected profits for the next 12 months, is 22 times, which is 35% higher than the long-term average. Among the 20 valuation indicators tracked by Bank of America strategists, this index shows overvaluation on each indicator. Kevin Gordon, Senior Investment Strategist at Jiaxin Wealth Management, said, "The current level of the market is sustainable, but we cannot have high confidence in the issue of 'starting from here'. Optimistic expectations for second half profits may be too high, coupled with multiples approaching the cycle high point, which will require profits to exceed expectations." In addition to profit growth, the strategist also stated that the Federal Reserve's significant interest rate cuts will be another way for the index to narrow the gap between fundamentals and market prices. (Golden Ten)
