As the calendar year wraps up, its easy to compare the current situation on equity markets to that of previous busts. So far the US NASDAQ has lost nearly 30% while the S&P500 has slumped some 16%, putting both in or near bear market territory.
But are we near the 2008 bust? Some would say so, making an analogy of this years’s run up and fail the initial setup of the 2009 crash:
But when you look at the monthly chart of the S&P500 its quite clear that this market is far from finishing its secular bull market run. This correction for now is more likely a proper reaction and reversion of risk in the post-COVID inflation surge as the US Federal Reserve tries to get inflation under control. Note how far away current price action is from the dominant decade plus trendline, which has been touched several times before:
From somewhat of a fundamental point of view however, the basic price/earnings (PE) ratio is actually still above that of the 2008 moves, now both tracking around 40% above the long term average:
