Sizzling returns from US equities: Too much of a good thing?

Sizzling market returns have given many investors the feeling that US stocks are overvalued. But judge market gains by earnings, and this is just not the case, explains J.P. Morgan's Paul Quinsee.

A consistent theme among investors is the feeling the US stock market is overvalued. But looking at widely-used valuation metrics, this just does not seem to be the case. Part of the problem may lie in the length and strength of the market rally. Since hitting a low point in March 2009, the S&P 500 has risen, with few major corrections, for five years and five months, as the index climbed 185% over that period. Instinctively, this feels like too much of good thing. Judging earnings To understand the rally, market gains should be judged alongside earnings. Operating earnings per sha...