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Tag: 10-year Treasury Bond

AP Photo/Mark Lennihan

Just How Overvalued are U.S. Stocks?

The average price-earnings ratio (PE) of US stocks is at 25.5, versus a 16.6 historical average. That means that the stock market is currently 51 percent overvalued. But the challenge for this simple formula is that with all-time low interest rates forcing down bond yields, we are in uncharted territory.