As of August 7, the price earnings ratio (CAPE) of the S&P 500 index Schiller had risen to 42.39 times, higher than the long-term average of 17.40 times, only lower than the historical peak of 44.19 times during the Internet foam period, and higher than the valuation level of 32.56 times before the 1929 crash, entering the range of CAPE exceeding 40 times for the second time in history. According to Jin Shi, CAPE indicators are used to measure long-term investment return expectations. At present, the historical cases of CAPE exceeding 40 times are concentrated in the Internet foam period from 1999 to 2000. Under high valuations, the long-term valuation tolerance of US stocks decreases, and future returns depend on the growth of corporate profits. If the profit realization of artificial intelligence falls short of expectations or actual interest rates rise, the high valuation environment may amplify market adjustment pressure, and the expected returns of the US stock market in the next decade will face downward pressure.
