According to the stock valuation chart, the stock market is now crossing the 115% ratio of total market cap against GNP. Which means we are crossing the border from modestly overvalued into significantly overvalued territory.
If global GDP weakens next year, a drop in the stock market will not be far off.
Stock Valuation Table |
In fact, Marc Faber forecasts that the global economy will weaken next year.
And this is also confirmed by the declining GDP growth estimates.
GDP Estimates |