Here is the S&P 500:
And, here is GDP:
If you divide the first chart by the second chart, you get a stock market valuation metric - essentially, how stocks are valued versus the underlying economy. Currently, that metric is at the highest it has been in sixty years:
Now, the S&P 500 is just an index and we are dividing it by a dollar value for domestic production so that may not seem quite right. Fortunately, the Wilshire 5000 has an index that uses a dollar market capitalization for the entire U.S. stock market:
And…we see the exact same thing here:
In terms of this metric, we are far into new territory we haven’t seen in more than sixty years. Stock valuation, by this measure, is at an extreme level. If that isn’t a good spooky story for October then you are certainly braver than I am!