Today’s Flow of Funds report published by the Federal Reserve reveals that the market value of the equity issued by US non-financial companies at the end of the third quarter was 0.91 times the net worth (assets minus liabilities) of those companies at replacement cost. The geometric average of equity Q since 1900 is around 0.65. The US stock market is therefore more than 40% overvalued relative to historical trends based on this yardstick.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services