With the August numbers in the books, let's jump right into the charts!
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Longtermtrends
With the August numbers in the books, let's jump right into the charts!
Let's start with valuation metrics for the US stock market. The PE Ratio for the S&P 500, the Shiller PE Ratio, Market Cap to GDP and the Dividend Yield for the S&P500 all are on elevated levels, comparable with the Dot-com bubble in year 2000.
PE Ratio
Market Cap to GDP
Shiller PE
Dividend Yield
Stocks also look expensive relative to bonds, real estate and commodities. However, they don't look so expensive relative to Gold, which looks expensive too, especially compared to real estate, oil and silver.
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Segmenting the US stock market, growth kept outperforming value, large-cap stocks kept outperforming small-cap stocks and the Nasdaq kept outperforming the S&P 500. Looking at sectors, the Technology sector kept extending its market share.

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Internationally, the US stock market kept outperforming the (aggregate) rest of the world and Emerging Markets kept underperforming Developed Markets.
Surprisingly, the Indian stock market recovered strongly from the Covid crisis and replaced the United States as the best performing stock market on a 8 year time frame.
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Looking at interest rates, the (nominal) yield on US Treasury bonds decoupled from the copper/gold ratio and fell to 1.3%. Inflation rose along with the M2 growth rate and reached 5.37%, leading real yields lower. Falling real yields have been supportive for Gold prices.
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Finally, looking at Crypto, Bitcoin inched closer to its high relative to Gold, and Ether continued its advance relative to Bitcoin.
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Do you have different interpretations to the charts or do you have ideas on how to improve Longtermtrends.net? - I'd love to hear them! Feel free to reply to this email or to contact me on Twitter.

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