Stocks Are Way Down. They’re Still Expensive.

US stocks are off to their worst start to a year in more than a half-century. By some measures, they still look expensive.

Wall Street often uses the ratio of a company’s share price to its earnings as a measuring stick for whether a stock appears cheap or pricey. By that metric, the market as a whole had been unusually expensive for much of the past two years, a period when especially easy monetary policy turbocharged the popular view that low interest rates gave investors few alternatives to stocks.