Evidence grows of potential Wall Street investment bubble impacting Australia

The US stock market is showing signs of being overpriced, with the S&P 500 index potentially facing a significant drop. Analysts are concerned about whether this decline will be a minor correction or a more severe crash. Investor sentiment is described as euphoric, raising questions about a possible market bubble. Historical examples of bubbles, like the tech and housing crises, highlight the risks associated with such investor behavior. Current price-to-earnings ratios for the S&P 500 are at their highest in over a decade, indicating expensive stocks. Experts suggest a potential 20% drop in Australian share valuations, but some believe markets may recover by the end of the year.