The way I think about it is "the stock market" (by which we mean the total value or price of stocks) is 2 different things. 1. Company financial performance (a

The way I think about it is "the stock market" (by which we mean the total value or price of stocks) is 2 different things. 1. Company financial performance (aka earnings) 2. Multiple at which the stock is valued (aka P/E) These are two independent features. Investors, for a variety of reasons, may change what multiple they value stocks at. Regardless of the company's actual performance. This can cause the price of the stock (and usually the market as a whole) to rise or fall, even if nothing changes about economic performance. Consequently, you can see the stock market deleveraging (the multiple decreasing) even while earnings (somewhat "the economy", ignoring tax impacts) remain strong.