9-3-26 Is the Stock Market Expensive or Cheap?

Is the stock market dangerously expensive, or are investors overlooking strong future earnings growth?

The S&P 500’s Shiller CAPE ratio has reached 41, yet the PEG ratio, which incorporates expected earnings growth, is signaling one of the cheapest market valuations in decades.

Michael Lebowitz and Lance Roberts examine why these two popular valuation measures are sending completely opposite signals. The key difference comes down to expectations: CAPE relies on historical earnings, while PEG depends heavily on Wall Street forecasts for future growth.

We look at the reliability of those earnings forecasts, the extraordinary concentration of expected growth among a handful of large technology companies, the role of AI investment, and whether today’s valuations already price in too much optimism.

0:00 INTRO

1:04 - Jobs, JOLTS, & Economic Number Previews

5:01 - Markets are Stuck

11:04 - Vacation & Weekend Plans

12:23 - The Fed: What Will Warsh Do With Rates?

16:12 - The Truth About "Fed Buy Backs"

17:57 - Inflation Expectations are not Reason to Raise Rates

21:29 - No Guidance from the Fed?