24/7 Wall St.

Stocks are less expensive than the have been at any time since 1991. The S&P 500 is valued at 15.4 times estimated profit, the lowest since January 1991, according to data compiled by Bloomberg. Corporate profits has been good. That makes equities appear even less expensive.

It is convenient thinking. But only compelling on the surface.

It ignores the fact that the mortgage business is going to get much, much worse. As variably rates reset to fixed, even well-to-do people will have problems paying.

Two large studies out in the last month indicate that oil prices are going to get a lot higher over next year, two years, and perhaps beyond. Demand is rising too fast. Supply is not rising. Too many refineries are off-line for repairs and up-grades.

Stocks appear cheap. As a multiple of profits and future profits, they may be. But, the macros are against the market, and the macros are getting worse.

Douglas A. McIntyre