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Fed rate rise putting a lid on US equity gains

Historical data shows valuations will fall once tightening begins, and lower earnings projections add to that risk, say analysts

Since price-earnings ratios reached their bull market bottom of 11.9 in October 2011, multiples for S&P 500 stocks jumped to 18.3 in December, rising in each calendar year to help push the index up 87 per cent.

New York

NEVER before has a rally in the US stock market gone on this long without a Federal Reserve interest rate increase. Expecting valuations to keep rising once one comes is asking too much, if history is any guide.

While Standard & Poor's 500 Index price-earnings ratios

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