The optimism over a prolonged economic boom is gaining traction. This week Jamie Dimon told JPMorgan shareholders that the good times “could easily run into 2023” for the US economy.

Similarly upbeat was an assessment by the IMF that the global economy will expand sharply in the next two years, led by the US and advanced economies.

Such confidence has helped global equities push further into record territory this week. But investors might want to ask: how much of the good news is already factored into stock market valuations?

“It gets tougher for investors during the second year of a recovery, because the stock market is a forward predictor,” said Andrew Slimmon, senior portfolio manager at Morgan Stanley Investment Management. “There is a lot of optimism about the economy reopening and for additional government stimulus, but the market has largely priced in that outcome.”

One way of gauging how far market…

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