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U.S. stocks hit a new intraday high this morning, with the benchmark S&P 500 (^GSPC -0.71%) up 0.51% at 1:30 p.m. EDT, and the index looks likely to achieve a new closing high as well. If so, it will break quite a drought: The previous high of 2,130.82 was set in May 2015. The Dow Jones Industrial Average (^DJI -0.93%) (DJINDICES: $INDU) was up 0.65%.

What a topsy-turvy world of finance we're in! Call me a skeptic, but it's hard for me to see how one justifies new highs (which is just another way of saying that the market looks at bit pricey). It's certainly hard to point to earnings. Alcoa will ring the bell on the start of the earnings season with its report after today's close. If the $28.08 consensus estimate for second-quarter operating earnings per share for the S&P 500 holds up (not a gimme), that would still be lower than earnings for the equivalent period two years ago!

True, this stems in large part from the collapse in energy sector earnings, but even if we exclude Energy, half of the 10 sectors in the S&P 500 will have grown earnings by less than 4% over the past two years (two of which, Financials and Consumer Staples, will show negative growth).

The results don't look much more encouraging if we use a more stable measure of earnings as a benchmark of earnings power. Robert Shiller's cyclically adjusted earnings, which takes a 10-year trailing average of inflation-adjusted earnings, is just 4% higher than it was two years ago.

Of course, stock prices are predicated on future earnings growth, not historical performance, but the level at which you start is not incidental. The S&P 500 is presently valued at nearly 19 times this year's earnings-per-share estimate ($113.96) and more than 26 times cyclically adjusted earnings -- not cheap by historical standards.

One might object that historical standards are of little use in such an extraordinary period. What do I mean by that? My proposition is that the only obvious rationalization for valuations at this level is the level of interest rates, which are at historical lows (over a very long history -- see the Tweet of the Day, below).

Still, while it's all well and good to say that stocks offer better relative value than bonds at this moment -- which is unarguably true -- if we look out over the next three, five or 10 years, it's probably worth tethering oneself (and one's portfolio) to some notion of absolute value. However long this ultra-low rate environment lasts, it's unlikely to be permanent. Once rates do go up, they will act as an anchor on stock price multiples, and thus on stock returns. Investors ought to be prepared for the very real possibility of middling returns over the next decade.

Tweet of the Day

US bond yields have never been this low -- and we looked at data since 1786 @MatthewPhillips

— Steven Russolillo (@srussolillo) July 11, 2016