S&P 500 Forward P/E Falls 9.9% as Earnings Jump 24.9%
Updated
Updated · yardeniquicktakes.com · Aug 22
S&P 500 Forward P/E Falls 9.9% as Earnings Jump 24.9%
3 articles · Updated · yardeniquicktakes.com · Aug 22
Summary
A 9.9% drop in the S&P 500’s forward P/E has made stocks cheaper than in January even as the index climbed 12.1% to record highs.
Forward earnings rose 24.9% year to date—about twice the pace of the index—driving the valuation reset through earnings growth rather than price speculation.
That earnings momentum has been unusually steady, while the price index has repeatedly stalled and pulled back instead of fully reflecting stronger profit expectations.
The gap is especially visible in leadership: the Magnificent 7 is up just 2.0% this year, versus 16.3% for the S&P 500 excluding those stocks.