Market Turning Points - 2026

Higher yields reduce what investors will pay for future earnings, so stock market valuation improves automatically as prices fall. That makes the measure strongest exactly when acting on it hurts most. This article covers why the multiple compresses, why stalled intermediate cycles and lower highs matter more than any valuation level, and what has to turn first. In 2022 the forward multiple fell from 21 to 15 on FactSet's measure while the index dropped 25.4 percent.

The question returns with urgency: are stocks overvalued? The instinct is to treat it as binary and brace for a crash. But overvaluation concentrates in specific sectors rather than spreading evenly, and it usually corrects through rotation, not collapse. Money leaves the crowded, expensive names and flows into reasonably valued sectors while the broad market holds. This article explains what overvaluation really means and why watching rotation beats reacting to a valuation m