U.S. stocks reached a new all-time high with the Wilshire 5000 market cap exceeding 212% of GDP. This level is a key warning indicator for potential market downturns. Global stock indexes remain near record highs, though mild sell-offs are occurring. Goldman Sachs reported an increase in speculative trading activity, particularly in unprofitable stocks and those with elevated earnings valuations. This speculative trading indicator is at a record high, reflecting concerns about market sustainability amid rising valuations.
The U.S. stock market has just blown through Warren Buffett's favorite economic indicator, stock market cap to GDP, setting a new all-time high.
Goldman Sachs launched a new 'Speculative Trading Indicator' that measures froth by gauging trade volumes in 'unprofitable stocks, penny stocks, and stocks with elevated EV/sales multiples.'
The indicator now sits at its highest level on record outside of 1998-2001 and 2020-2021, although it remains well below the highs reached in those episodes.
While most indexes in Asia and Europe remain near their all-time highs, there is broad-based but mild selling in all of them.
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