{"id":64556,"date":"2026-05-17T01:17:55","date_gmt":"2026-05-17T01:17:55","guid":{"rendered":"https:\/\/thepatientinvestor.com\/?p=64556"},"modified":"2026-05-17T01:17:55","modified_gmt":"2026-05-17T01:17:55","slug":"us-market-snapshot-23","status":"publish","type":"post","link":"https:\/\/thepatientinvestor.com\/index.php\/2026\/05\/17\/us-market-snapshot-23\/","title":{"rendered":"US Market Snapshot"},"content":{"rendered":"
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\"Bull-Bear<\/div>\n
\"Stock<\/div>\n<\/div>\n

The gauge on the left indicates whether the market is in a bull or bear phase, and the indicator on the right reflects the current valuation of the stock market. Stock market pricing indicates whether stocks are cheap or expensive in relation to earnings, but it is a poor indicator of market timing<\/strong>. We do not recommend selling stocks because market valuations are high; however, we recommend exercising caution when adding new positions.<\/p>\n

Bull\/Bear Market<\/h2>\n

We have revised the bull-bear market leading indicator to improve its responsiveness, stripping it down to a composite of five key indicators. At present, two of five indicators signal risk-off, indicating medium risk of a US bear market.<\/p>\r\n\r\n

\"Bull\/Bear<\/p><\/div>\n

Freight Transport Activity<\/h3>\n

The plunging Cass Freight Shipments Index warns of contracting economic activity, signaling risk-off. The index highlights broad freight shipping levels in the mainstream economy, and a rise or fall of more than 3 basis points signals risk-on or risk-off, respectively.<\/p>\r\n\r\n

\"Cass<\/p><\/div>\n

Stock Pricing<\/h2>\n

US stock pricing increased to 96.17% from 95.96% last week, against a recent low of 91.79% six weeks ago.<\/p>\r\n\r\n

\"US<\/p>\r\n

We use z-scores to measure each indicator's current position relative to its historical data, with results expressed in standard deviations from the mean. We then calculate an average of the five readings and convert that to a percentile. The higher the stock market price measure is relative to the historical mean, the greater the risk of a sharp drawdown.<\/p><\/div>\n

Buffett Indicator<\/h3>\n

Warren Buffett's favorite long-term measure of stock market valuation compares stock market capitalization to GDP, providing a stable, long-term ratio unaffected by fluctuating profit margins. The ratio reached a new high of 3.16 last week, more than double its long-term average of 1.2.<\/p>\r\n\r\n

\"Buffett<\/p><\/div>\n

Dow Jones Industrials Price-to-Sales<\/h3>\n

The Price-to-Sales ratio for the Dow Jones Industrial Average has reached a new high of 4.10. We use a 20% trimmed mean of the Price-to-Sales ratio for the 30 stocks in the Dow to remove the most extreme readings that would otherwise distort the ratio.<\/p>\r\n\r\n

\"Dow<\/p><\/div>\n

Shiller CAPE<\/h3>\n

Robert Shiller's CAPE compares the S&P 500 index to its 10-year average of inflation-adjusted earnings, smoothing business-cycle distortions. The present peak of 40.4 is the second-highest in history, behind only the Dotcom bubble in 2000, and far above its long-term average of 22.4.<\/p>\r\n\r\n

\"Robert<\/p><\/div>\n

Conclusion<\/h2>\n

The Bull-Bear indicator suggests the US economy is slowing, but is not yet in a recession. <\/p>\n

Extreme pricing, however, elevates the risk of a significant drawdown.<\/p>\n

Acknowledgments<\/h4>\n