S&P 500 Valuation – Real Market Capitalization to Real GDP Ratio The inflation-adjusted market capitalization to GDP ratio is a valuable tool to evaluate the U.S. stock market’s valuation. The high current ratio implies a potential overvaluation. Image: Real Investment Advice
S&P 500 Valuation Matrix (12-Month Forward EPS and P/E Multiple) According to Morgan Stanley, U.S. equity market gains in 2024 may stall due to high forward multiples and ambitious earnings forecasts for the next 12 months. Image: Morgan Stanley Wealth Management
S&P 500 Valuation Multiples S&P 500 valuation multiples remain stretched and well above averages. Image: Goldman Sachs Global Investment Research
S&P 500 Valuation Dispersion of Forward P/E vs. Relative Performance of Russell 1000 Growth over Value Valuations dispersion remains at high levels and is 42% above its long-term median. Image: BofA US Equity & Quant Strategy
VIX (Volatility Index) vs. S&P 500 Valuation The S&P 500’s valuation tends to be higher when the VIX declines sharply. Image: Jeroen Blokland
Estimated S&P 500 Valuation Depending on Election Outcome According to Goldman Sachs, a Democratic sweep could lift the S&P 500 Index to 3400 in the near-term, and to 3800 in mid-2021. Image: Goldman Sachs Global Investment Research
S&P 500 Valuation – Average 12m Fwd P/E and Y/Y Headline Inflation Chart suggesting that rising inflation is good for P/E until inflation exceeds 3%. Image: Goldman Sachs Global Investment Research
S&P 500 Valuation Dispersion on Forward P/E When valuation dispersion was this high, value stocks tended to outperform growth stocks. Image: BofA US Equity & Quant Strategy
S&P 500 Valuation and P/E Next Twelve Months Chart showing that the S&P 500 forward P/E has dropped from 19.1x to 17.7x. Image: Fidelity Investments
S&P 500 Valuation Metric Is the U.S. equity market overvalued? The S&P 500’s median valuation metric is in the 89th percentile. That’s not cheap by historical standards. Image: Goldman Sachs Global Investment Research
S&P 500 Valuation Ranking On a P/E basis, the S&P 500 Index is now valued at the 88th percentile vs. 28th percentile a year ago. Image: Fidelity Investments