The stock market is on sale. That doesn’t make it cheap

Almost the entire fall in stocks up to early June was due to the effect of rising rates on valuations of expected earnings. (Photo: AP)Premium
Almost the entire fall in stocks up to early June was due to the effect of rising rates on valuations of expected earnings. (Photo: AP)
 wsj 4 min read . Updated: 21 Jul 2022, 05:08 PM IST James Mackintosh, The Wall Street Journal

Valuations have plummeted at a record rate, but that’s before Wall Street has taken account of a slowing profit growth

The valuation of the U.S. stock market has fallen faster than in the aftermath of the dot-com crash, recording the biggest six, 12 and 18-month drops since data on price-to-forward-earnings ratios began in 1985. That should be only a slight consolation to investors.

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