US: stocks cost 40.7 times average annual earnings; at the 1999 peak, 44.2
October 2026, month not over yet. Price relative to ten-year average real earnings. A high valuation does not tell when a crash will happen.
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Market valuation relative to smoothed earnings.
A higher line means a higher price relative to ten-year real earnings.
- October 2026 ratio
40.7
The annual axis selects the last published month of each year, labelled with its actual date. The current year is incomplete; this is neither a full-year mean nor a live quote. CAPE divides price by trailing ten-year average real earnings; TR CAPE adjusts for payout changes and reinvestment. Excess CAPE yield compares inverse CAPE with a real long-term rate, not a promised return. Price is normally a daily-close monthly mean; the author interpolates earnings and dividends between quarterly or annual observations. High CAPE does not date a crash. The latest month may be incomplete. Author note: Oct price is Oct 2nd close | Sept/Oct CPI estimated | Oct GS10 is Oct 2nd value
The author’s latest point may use estimated CPI and a price on a single date, not a final monthly mean.
A question for this picture
How does the valuation change with reinvested payouts?