الأربعاء, 24 تشرين1/أكتوير 2018 09:42

How Far Does the S&P 500 Need to Fall to be Cheap?

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(New York)

The S&P 500 is off about 6% this month, almost enough to eliminate its gain for the year. At the same time, earnings have grown strongly. Put together, a good question emerges: when do stocks again become cheap? In the last several selloffs, stocks have found support when valuations fell to 15x earnings, so it seems a good target. Taking account of various earnings forecasts, it appears stocks would need to fall a further 14% from here to make it to that level.


FINSUM: That would put the S&P 500 near a bear market just to bring the p/e ratio back down to 15x. Bleak.

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