America’s searing market rally brings new risks

SINCE AMERICA elected Donald Trump as president on November 5th, the value of its listed firms has increased by $4.2trn, more than the entire worth of London’s stockmarket. The S&P 500 is up by nearly 30% this year. At 23 times its forward earnings, the index has rarely been so highly rated by investors. Nor, in recent years, have its constituents been able to borrow more cheaply. The cost for risky companies of raising funds is at its lowest relative to Treasury bonds since the spring of 2007. Everywhere you look, there are signs of exuberance. This month the price of bitcoin reached $100,000. And all this is happening despite positive real interest rates.