Just how frothy is America’s stock market?

IT IS the most wonderful time of the year, and for investors in America’s stock market, that is saying something.

They have had a marvellous 2024, as share prices that had already soared in 2023 just kept on going. The S&P 500 index of large firms is now 54 per cent higher than it was two years ago, a winning streak it has bettered just a handful of times since its inception in 1957.

To be sure, there have been jitters along the way. The most recent came on Dec 18, when share prices fell by 3 per cent in a single day after the Federal Reserve predicted it would cut rates by less than the market expected in 2025.