Commentary

“Animal spirits” push stock valuations higher as fundamentals take a backseat

Historically, after valuations have expanded, earnings have tended to catch up.

By: Denise Chisholm

Updated: 2/20/2025

Key Takeaways

After a rocky start to the month, stocks climbed in January and pushed valuations higher.
Some investors worry that rising multiples mean prices are bound to fall—but several signals suggest a positive setup for the year, especially for cyclical sectors.

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"Animal spirits" push stock valuations higher as fundamentals take a backseat

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