The S&P 500 hit several new highs in August, driven by corporate profits that reached a post-war record in the second quarter, representing 17.9% of U.S. national income, the highest share since 1947. After-tax profits also hit an all-time high at 14.6% of national income. Second-quarter earnings per share for the S&P 500 beat expectations by 50% annually according to Evercore ISI. Meanwhile, the labor share of national income fell to 60.2%, the lowest level since 1951, and the S&P 500’s CAPE ratio stands at its second-highest level ever, trailing only the dot-com bubble peak of 2000.
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