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Shares of Morgan Stanley (MS.N) slid 6.9 percent in their largest one-day drop since November 2012, while rival Goldman Sachs (GS.N) fell 4.6 percent. Both closed at their lowest since 2013.

Facebook Inc (FB.O), Amazon.com Inc (AMZN.O) and other technology stocks that had lent strength to the market last year extended their decline from Friday. Fund managers said last year's outsized gains among some Internet stocks made them the first choice to sell now.

The Dow Jones industrial average .DJI closed down 177.92 points, or 1.1 percent, at 16,027.05, the S&P 500 .SPX lost 26.61 points, or 1.42 percent, to end at 1,853.44 and the Nasdaq Composite .IXIC dropped 79.39 points, or 1.82 percent, to 4,283.75.

Falling oil prices along with concern over a worsening global growth outlook have caused a sharp selloff in stocks this year. Investors have been searching for a catalyst that might change the market's course.

Adding to recent woes for the tech sector, Cognizant (CTSH.O) dropped 7.7 percent to $54.05 after the IT services provider issued a weak sales forecast. Amazon fell 2.8 percent while Facebook dropped 4.2 percent

Declining issues outnumbered advancing ones on the NYSE by 2,484 to 618; on the Nasdaq, 2,029 issues fell and 804 advanced. The S&P 500 posted 7 new 52-week highs and 97 new lows; the Nasdaq recorded 4 new highs and 495 new lows.

What, after all, is the main alternative to investing in stocks? Buying bonds. Yet these days bonds offer incredibly low returns. The interest rate on 10-year U.S. government bonds is only 0.6 percent

So buying stock in companies that are still profitable despite the Covid-19 recession looks pretty attractive.

And why are interest rates so low? Because the bond market expects the economy to be depressed for years to come, and believes that the Federal Reserve will continue pursuing easy-money policies for the foreseeable future

for a few weeks in March the world teetered on the edge of a 2008-type financial crisis, which caused investors to flee everything with the slightest hint of risk.

That crisis was, however, averted thanks to extremely aggressive actions by the Fed, which stepped in to buy an unprecedented volume and range of assets.

But back to the disconnect between stocks and economic reality. It turns out that this is a long-term phenomenon, dating back at least to the mid-2000s.

Think about all the negative things we’ve learned about the modern economy since, say, 2007. We’ve learned that advanced economies are much less stable, much more subject to periodic crises, than almost anyone believed possible.

Productivity growth has slumped, showing that the information technology-fueled boom of the 1990s and early 2000s was a one-shot affair. Overall economic performance has been much worse than most observers expected around 15 years ago.

Stocks, however, have done very well. On the eve of the Covid crisis, the ratio of market capitalization to G.D.P. — Warren Buffett’s favorite measure — was well above its 2007 level, and a bit higher than its peak during the dot-com bubble. Why?

The main answer, surely, is to consider the alternative. While employment eventually recovered from the Great Recession, that recovery was achieved only thanks to historically low interest rates. The need for low rates was an indication of underlying economic weakness: businesses seemed reluctant to invest despite high profits, often preferring to buy back their own stock. But low rates were good for stock prices.

None of this should be taken as a statement that current market valuations are exactly right. My gut sense is that investors are too eager to seize on good news; but the truth is that I have no idea where the market is headed.

The point, instead, is that the market’s resilience does, in fact, make some sense despite the terrible economic new

GameStop continued to soar as the Reddit investors stayed bullish on their favorite stock. By Jan. 22, it closed at $65. On Monday, it finished at nearly $77. On Tuesday, it nearly doubled to close at around $148. And Wednesday, it more than doubled, ending at $347.51.

Another member suggested that the Reddit traders were part of a resistance movement of sorts, writing, "[T]his is not a war on billionaires, the wealthy yada yada, but it may well be described as a resistance against injustice, inequality, rigged rules, uneven playing field etc which has been rampant on Wall Street forever."

With the stock market near all-time highs, there had already been worries that a bubble was coming. "The danger, as the dot-com bubble showed, is that Mr. Market can rationalize just about anything and build it into a narrative,"

Indexing has gone big, very big. For nine in 10 companies on the S&P 500, their largest single shareholder is one of the Big Three. For many, the big indexers control 20 percent or more of their shares. Index funds now control 20 to 30 percent of the American equities market, if not more.

The problem is that the public markets have been cornered by a group of investment managers small enough to fit at a lunch counter, dedicated to quiescence and inertia.

Passively managed investment options do not just outperform actively managed ones in terms of both better returns and lower fees. They eat their lunch.

Let’s imagine that a decade ago you invested $100 in an index fund charging a 0.04 percent fee and $100 in a traditional mutual fund charging a 1.5 percent fee. Let’s also imagine that the index fund tracked the S&P 500, and that the mutual fund ended up returning what the S&P 500 returned. Your passively invested $100 would have turned into $356.66 in 10 years. Your traditionally invested $100 would have turned into $313.37.

Actively managed investment options could make up for their higher fees with higher returns. And some do, some of the time. Yet scores of industry and academic studies stretching over decades show that trying to beat the market tends to result in lower returns than just buying the market. Only a quarter of actively managed mutual funds exceeded the returns of their passively managed cousins in the decade leading up to 2019,

What might be good for retail investors might not be good for the financial markets, public companies, or the American economy writ large, and the passive revolution’s scope has raised all sorts of hand-wringing and red-flagging. Analysts at Bernstein have called passive investing “worse than Marxism.” The investor Michael Burry, of The Big Short fame, has called it a “bubble,” and a co-head of Goldman Sachs’s investment-management division has warned about froth too. Shortly before his death in 2019, Bogle himself warned that index funds’ dominance might not “serve the national interest.”

One primary concern comes from the analysts at Bernstein: “A supposedly capitalist economy where the only investment is passive is worse than either a centrally planned economy or an economy with active, market-led capital management.”

Active managers direct investment dollars to companies on the basis of those companies’ research-and-development prospects, human capital, regulatory outlook, and so on. They take new information and price it into a company’s stock when buying and selling shares.

Passive investors, by contrast, ignore annual reports and market rumors. They do nothing with trading-floor gossip. They make no attempt to research what to invest in and what to skip. Whether holding international or domestic assets, holding stocks or bonds, or using a mutual-fund structure or an ETF structure, they just mirror the market. Big U.S.-stock index funds buy big U.S. stocks just because they’re big U.S. stocks.

At least in a Soviet-type centrally planned economy, apparatchiks would be making some attempt to allocate resources efficiently.

Passive management is merely a giant phenomenon, not an all-encompassing one. Hundreds of actively managed mutual funds are still out there, as are legions of day traders, hedge funds, and private offices buying and selling and buying and selling. Stock prices still move around, sometimes dramatically, on the basis of new data and new ideas.

Still, passive investing may well be degrading the informational content of the markets, messing up price signals and making business decisions harder as a result.

When one of these commodities ends up on an index, the firms that use that commodity in their business see a 6 percent increase in costs and a 40 percent decrease in operating profits, relative to firms without exposure to the commodity, the academics found

Their theory is that ETF trading shifts prices in subtle ways, making it harder for businesses to know when to buy their gold and copper. Corporate executives “are being influenced by what happens in the futures market, and what happens in the futures market is being influenced by ETF trading,”

More broadly, the Bernstein analysts, among others, worry that index-linked investing is increasing correlation, whereby the prices of stocks, bonds, and other assets move up or down or sideways together.

the price fluctuations of a newly indexed stock “magically and quickly” change. A firm’s shares begin to move “more closely with its 499 new neighbors and less closely with the rest of the market. It is as if it has joined a new school of fish.”

A far bigger concern is that the rise of the indexers might be making American firms less competitive, through “common ownership,” in which the mega-asset managers control large stakes in multiple competitors in the same industry. The passive firms control big chunks of the airlines American, Delta, JetBlue, Southwest, and United, for instance

The rise of common ownership might be perverting corporate behavior in weird ways, academics argue. Think about the incentives like this: Let’s imagine that you are a major shareholder in a public widget company. We’d expect you to desire—insist, even—that the company fight for market share and profits. But now imagine that you are a major shareholder in all the important widget companies. You would no longer really care which one succeeded, particularly not if one company doing better meant another company doing worse. You’d just care about the widget sector’s corporate profits, which would go up if the widget companies quit competing with one another and started raising prices to pad their bottom line.

one major paper showed that common ownership of airline stocks had the effect of raising ticket prices by 3 to 7 percent.

A separate study showed that consumers are paying higher prices for prescription medicines because generic-drug makers have less incentive to compete with the companies making name-brand drugs.

Yet another study showed that common ownership is leading retail banks to charge higher prices.

Across firms, executive compensation seems to be more closely linked to a company’s performance when its shareholders are not invested in the company’s rivals, the study found. In other words, firms stop paying managers for performance when owned by the same people who own their rivals.

The market clout of the indexers raises other questions too. The actual owners of the stocks—not the index-fund managers but the people putting money into index funds—have little say over the companies they own. Vanguard, Fidelity, and State Street, not Mom and Dad, vote in shareholder elections

In fact, the Big Three cast roughly 25 percent of the votes in S&P 500 companies.

In an interview with The Wall Street Journal, the chief executive officer of State Street said he thought it was “almost inevitable, when you see this kind of concentration, that it probably will make sense to do something about it.”

But figuring out what the appropriate restrictions are depends on determining just what the problem with the indexers is—are they distorting price signals, raising the cost of consumer goods, posing financial systemic risk, or do they just have the market cornered? Then, what to do about it? Common ownership is not a problem the government is used to handling.

, thanks to the passive revolution, a broad variety and huge number of firms might have less incentive to compete. The effect on the real economy might look a lot like that of rising corporate concentration. And the two phenomena might be catalyzing one another, as index investing increases the number of mergers and makes them more lucrative.

In recent decades, the whole economy has gone on autopilot. Index-fund investment is hyperconcentrated. So is online retail. So are pharmaceuticals. So is broadband. Name an industry, and it is likely dominated by a handful of giant players. That has led to all sorts of deleterious downstream effects: suppressing workers’ wages, raising consumer prices, stifling innovation, stoking inequality, and suffocating business creation

The problem is not just the indexers. It is the public markets they reflect, where more chaos, more speculation, more risk, more innovation, and more competition are desperately needed.

Then invest your remaining money in safe assets, i.e., TIPS — Treasury Inflation Protected Securities. This sets a floor to your living standard. Until you withdraw money from the stock market, you spend only the floor amount

As you withdraw from the market, invest the proceeds in TIPS, which gives you more safe assets, justifying a higher living-standard floor.

Taking dividends and safely investing them is an example of “upside investing.” The key thing is never spending out of a pool of funds that isn’t fully safe. This way your living-standard floor will only rise

ersions of “upside investing” are considered in “Risk Less and Prosper: Your Guide to Safer Investing” by Zvi Bodie and Rachelle Taqqu.

people who said owning a house is a good way to protect yourself from the vicissitudes of the markets. Is that true, and if so, why?

Absolutely. When you own your home you’re protected from rent increases. The shelter that the house provides is like an inflation-protected annuity you might buy from an insurance company.

The one big advantage, though, even if you must move, is that homes are real assets. As such, they should maintain their real value during periods, like now, of high inflation.

Wall Street’s focus is on probability, whereas economists focus on outcomes. Losing everything, not matter how low the probability, is not something an economist would ever entertain as part of a reasonable financial plan.

if you do lose, it can be disastrous. Suppose you are blindfolded and have two options — stay where you are (hold safe bonds) or toss a die (hold risky stock).

many readers said that there’s no reason for a long-term investor to shy away from stocks because they always go up in the long run, say, over 20 or 30 years. Your response?

Unfortunately, the history is far too short to provide statistical reliability about cumulative returns over independent 30-year holding periods.

This statement is wrong. There are several 30-year periods over which stocks barely rose in inflation-adjusted terms, and many 20-year periods in which they outright declined. Plus, we don’t have enough independent observations to go on.

Fox programs have soft-pedaled the government's shortcomings and promoted an imminent rollback of social distancing restrictions. Public health experts say such a change could be catastrophic because it would cause a surge in new coronavirus infections.But Trump was barely challenged on that point when Fox anchors interviewed him on Tuesday.

Throughout the duration of the coronavirus crisis, Trump has appeared at regular White House briefings, and has attracted criticism for spreading misinformation from the podium.He has given interviews to Fox but has declined virtually all other interview requests.

There’s been a lot of cheap money floating around in the past decade, thanks to low interest rates and Federal Reserve policy. Much of that has gone into financial assets, jacking up the wealth of those who own them.

“Eighty percent of the stock is owned by 20% of the people,” he said. (The reality is actually more extreme than that, with the richest 10% holding 84% of equity wealth, according to economist Edward Wolff.)

one of many changes wrought by the pandemic is that it’s shown how aggressive government spending to put cash in ordinary Americans’ pockets can do a lot of good. What if there was an economy where households relied less on wealth trickling down from asset owners? That would be something for Wall Street to be nervous about.

A little perspective is important, though. China's stock market is still small enough that what happens in it doesn't really matter for its economy. Sure, it might turn into a few bad days for our markets, but just that

The far, far bigger story is whether China's actual economy keeps growing fast or keeps slowing down. So it's only insofar as Beijing's bungled stock market rescue tells us some

keeping your country as open as possible to as many flows as possible is advantageous for two reasons: You get all the change signals first and have to respond to them and you attract the most high-I.Q. risk-takers, who tend to be the people who start or advance new companies.

The wisest leaders also understand that all the big problems today are global problems, and they have only global solutions. I am talking about climate change, trade rules, technology standards and preventing excesses and contagion in financial markets

you need to be part of a wider coalition like the European Union. The U.K. membership in the E.U. has given it an outsize voice in world affairs.

How quickly they’ve all forgotten that the E.U. and NATO were built to prevent the very competitive nationalism that ran riot in Europe in the 20th century and brought us two world wars.

He saved himself from larger losses by selling a big chunk of his Amazon shares in February, before the worldwide scale of the coronavirus crisis was fully acknowledged and before the stock market collapse

Bezos sold $3.4bn worth of Amazon shares in the first week of February, just before the stock price peaked.

his timing was near-perfect. The share sales, which represented about 3% of his total holding, were much greater than Bezos had made in previous months. The stock sold was as much as he had sold in the previous 12 months, according to analysis by the Wall Street Journal.

Other US executives that have been either lucky or smart by selling large chunks of their shareholdings in February include Larry Fink, the chief executive of fund manager BlackRock, who saved potential losses of $9m, and Lance Uggla, CEO of data firm IHS Markit, who sold $47m of shares on 19 February that would have dropped to $19m if he had held on to them.

In total US executives sold about $9.2bn in shares of the companies they run in the five weeks before the start of the stock market rout. Selling before the 30% collapse in the market saved them from paper loses of $1.9bn.

"Many of our investors have demonstrated support and confidence in AMC. We intend to communicate often with these investors, and from time to time provide them with special benefits at our theatres," Adam Aron, AMC's CEO, said in a statement.

Paramount's "A Quiet Place Part II," a new horror film starring Emily Blunt, opened to the biggest weekend of the pandemic so far, notching $48.3 million for its three-day debut in North America over Memorial Day weekend.

The good news on Wall Street also came a day after AMC announced that it raised $230.5 million by selling 8.5 million shares to Mudrick Capital Management.

the turnaround is also getting a boost from movies — as well as audiences — returning to theaters over the last few months, punctuated by last weekend's big box office numbers.

Other promotions include special discounts and screening invites for retail backers.

Goldman Sachs downgraded shares of theater chain Cinemark (CNK) and big screen operator IMAX (IMAX) to a rare "sell" rating on Wednesday.

Some of the year's biggest winners are investors who closed their eyes and muffled their ears during the pandemic selloff and held onto their stocks. By the end of the year, their portfolio balances were looking pretty good

"This year was a year with a lot of reminders for investors: number one, don't overreact," Leo Grohowski, chief investment officer at BNY Wealth Management, told CNN Business.close dialogBefore Markets OpenStart your day smartGet essential news and analysis on global markets with CNN Business’ daily newsletter. Sign me upNo thanksBy subscribing you agree to ourprivacy policy.By subscribing you agree to ourprivacy policy.Before Markets OpenStart your day smartGet essential news and analysis on global markets with CNN Business’ daily newsletter. Please enter aboveSign me upNo thanksBy subscribing you agree to ourprivacy policy.By subscribing you agree to ourprivacy policy.Before Markets Open

The disconnect between Wall Street and Main Street will likely be a topic that follows us into the New Year.

The US economy is operating at 82% of where it was in early March, according to the Back-to-Normal Index from Moody's Analytics and CNN Business.

Consider Yahoo. The company bought back shares worth $6.6 billion from 2008 to 2014, according to Robert L. Colby, a retired investment professional and developer of Corequity, an equity valuation service used by institutional investors. These purchases helped increase Yahoo’s earnings per share about 16 percent annually, on average.

a company’s overall profit growth is unaffected by share buybacks. And comparing increases in earnings per share with real profit growth reveals the impact that buybacks have on that particular measure. Call it the buyback mirage.

Those who run companies like buybacks because they make their earnings look better on a per-share basis. When fewer shares are outstanding, each one technically earns more.

But a good bit of that performance was the buyback mirage. Growth in Yahoo’s overall net profits came in at about 11 percent annually

Given these figures, Mr. Colby reckoned that Yahoo, if it had invested that same amount of money in its operations, would have had to generate only a 3.2 percent after-tax return to produce overall net profit growth of 16 percent annually over those years.

But Mr. Colby pointed out that buybacks provide only a one-time benefit, while smart investments in a company’s operations can generate years of gains.

Mr. Colby said his research “confirms my suspicion that while buybacks are not universally bad, they are being practiced far more broadly and without as much analysis as there should be.”

Perhaps the crucial flaw in buybacks is that they reward sellers of a company’s stock over its long-term holders. That’s because a company announcing a repurchase program usually sees its stock price pop in the short term. But passive investors, such as index funds, and other long-term holders gain little from the programs.

Another hazard: companies that spend billions to repurchase stock without substantially shrinking the number of shares outstanding. That’s because in these circumstances, prized corporate cash is used to buy back shares that offset stock grants bestowed on company executives in rich compensation plans.

And there are plenty of companies whose buybacks have simply left them with less money to invest in more promising opportunities. Advertisement Continue reading the main story “By throwing away money on buybacks, companies are giving up on the ability to grow in the future,”

proposals ask the companies to adopt a policy of excluding the effect of stock buybacks from any performance metrics they use to determine executive pay packages.

At 3M, for example, research and development expenditures plus strategic acquisitions have totaled $22 billion over the last five years, Mr. Kanzer said. In the meantime, the company’s buyback program has cost $21 billion.

“You really have to ask why a company’s board decides to return a big chunk of capital instead of replacing managers with ones who can figure out how to develop the operations,”

“If the board doesn’t think it’s worth investing in the company’s future,” Mr. Lutin added, “how can a shareholder justify continuing to hold the stock, or voting for directors who’ve given up?”

Such big drops are a reminder of how investors don't have any tolerance when stocks at large are hovering around their long-term average valuations. "Any company that misses in this environment is getting hurt big time," says Peter Cardillo of Rockwell Global Capital. "It's a question of investors not being forgiving."

At the risk of oversimplifying, take the example of a family with a diabetic member who must pay for insulin on a regular basis

The family also happens to own stock in the three powerful pharmaceutical companies that manufacture insulin in the United States

price increases have resulted in higher profits for company executives and their shareholders.

Whether those price hikes ultimately harm or benefit the family depends on two factors: how much they spend on insulin and how much of a stake in the insulin companies they own through the stock market.

researchers use data from the federal Survey of Consumer Finances and the Consumer Expenditure Survey to calculate the distribution of corporate equity (e.g., stocks and business equity) and of total consumer expenditures. They find that corporate equity is much more unequally distributed than expenditures.

The top 20 percent of U.S. households own nearly 90 percent of the country’s total equity, according to their calculations. But those households account for a hair under 40 percent of total consumer spending

the bottom 80 percent of the country owns just 10 percent of the equity but spends 60 percent of the money.

On net, that means it’s nearly impossible for the typical U.S. family to make up for higher prices via the performance of their stock portfolio. When prices rise, low- and middle-class families pay. Wealthy families profit

They find that monopolistic pricing takes a bite out of every income group’s share of national income, with the notable exception of the top 20 percent, whose incomes rise. In effect, companies are using their market power to extract wealth from poor and middle-class households and deposit it in the pockets of the wealthy, to the tune of about 3 percent of national household income in 2016.

The implication of these findings is that antitrust enforcement has potential to be a tool in the fight against rising inequality by reducing the ability of large companies to set high prices that primarily benefit the wealthy. Conversely, the findings suggest that a recent lapse in that enforcement is contributing to the growing gap between the rich and poor.

A new study by finance professors Aleksandar Andonov of Erasmus University Rotterdam and Joshua Rauh of Stanford University looks at expected returns among more than 230 public pension plans with more than $2.8 trillion in combined assets.

For their portfolios, generally consisting of cash, U.S. and international bonds and stocks, real estate, hedge funds and private-equity or buyout funds, these pension plans report that they will earn an average of 7.6% annually over the long term. (That’s 4.8% after their estimates of inflation.) These funds often define “long term” as between 10 and 30 years.

Based on how they divvy up their money, how much are these pension funds assuming specific assets will earn?

They expect cash to return an average of 3.2% annually over the long run; bonds, 4.9%; such “real assets” as commodities and real estate, 7.7%; hedge funds, 6.9%; publicly traded stocks, 8.7%; private-equity funds, 10.3%.

consider bonds. The simplest reliable indicator of how much you will earn from a portfolio of bonds in the future is their yield to maturity in the present. With 10-year Treasurys yielding 2.6% and investment-grade corporate bonds averaging under 3.7%, it would take a near-miracle today to get anything close to 4% out of a high-quality fixed-income portfolio.

That’s below the U.S. average of 10.2% annually over the past 90 years. But stocks were far cheaper over most of that period than they are today, so their returns were naturally higher.

stocks aren’t likely to earn more than an average of 5.9% annually over the long run from today’s lofty prices.

Among those, the least implausible scenario is higher inflation. So the pension funds could hit their 8.7% stock return that way — but such a surge in the cost of living would crimp their bond returns. What they would gain on their stocks they would lose on their bonds.

the new study of estimated returns finds that the older a pension fund’s holdings of private equity are, the more likely its officials are to extrapolate those returns — as if the good times of the early 2000s, when deals abounded and buyouts were cheaper, were still rolling.

Why do expectations among pension plans run so high? Because they have to, the chief investment officer of a large public pension plan tells me. State laws guarantee generous retirement benefits for millions of current and former government employees. To appear as if they can meet those obligations, the pension plans have no choice but to set their expected returns higher than reality is likely to deliver.

That’s the exact opposite of what the rest of us should do. Sooner or later, investors who build their expectations on hope rather than on arithmetic end up sorry.

Of course, presidents can and do marginally affect markets, especially Trump. His trade war was a negative for the markets; his corporate tax cut was a booster, at least for a blip. His shaky, chaotic response to the coronavirus probably contributed to the ongoing, huge sell-off. None of this contradicts the foolishness of linking your performance to a metric far outside of your control.

Does it matter to the bigger picture if Trump claims credit and gets blame for market swings?

think it does, and that Trump’s market fetish is a microcosm of a dynamic for which we’re paying a heavy price. It’s the replacement of any shred of concern for the quality of governance with vicious, partisan 24/7 politics

Trump’s stock market focus is a symptom of the broader problem with conservatives who, since Ronald Reagan, have defined governing as tax cuts for their donor base, deregulating industry, and the use of racial divisions and other types of identity politics to split the electorate.

When governance is replaced with this sort of self-dealing, government itself becomes incapable of heeding the many warnings that pandemic preparedness was essential

Instead, Trump shut down the Obama-era office set up after the Ebola epidemic. Its mission was “to do everything possible within the vast powers and resources of the U.S. government to prepare for the next disease outbreak and prevent it from becoming an epidemic or pandemic.”

More broadly, when governance is disparaged and ignored, government is incapable of dealing with climate change, inequality, poverty or any of the challenges private markets cannot and will not take on

before the coronavirus pandemic, the ineptitude of team Trump wasn’t so clearly and dramatically tested.

If there’s a silver lining to the coronavirus, it is this. People — more pointedly, voters — need to understand in their guts that good governance isn’t just an essential function in a $22 trillion, globalized economy. It’s sometimes a matter of life and death.

That increases demand, which increases the stock’s price. Which means the brokers have to buy more shares, which means … you get the idea.

This weird little bubble doesn’t just affect the bettors, though. If big investors on the losing side of these trades have to raise money to cover their losses, it could mean dumping enough shares to hurt the prices of otherwise solid stocks.

If the sell-off is big enough, it could have a cascading effect that leads to broader losses for investors who have never bought or sold a share of GameStop.

The S&P 500 trades at 16 times forecast earnings, he calculates, well above 13, the average going back to the 1970s. Since 1976, it has hardly ever surpassed 17 times forecast earnings. The main exception came during the stock bubble of the late 1990s and early 2000s.

His conclusion: Investors are overexposed to stocks, but they haven’t gone to bubblelike extremes

EU citizens have no means of legal recourse against the misuse of their data in the United States, the court said. A bill is currently winding its way through the U.S. Congress to give Europeans the right to legal redress.

ECJ in its ruling referred to revelations from former National Security Agency contractor Edward Snowden, which included that the Prism program allowed U.S. authorities to harvest private information directly from big tech companies such as Apple (AAPL.O), Facebook (FB.O) and Google.

IBM (IBM.N) said it created commercial uncertainty and jeopardized the flow of data across borders.