|Yardeni last weekend had consensus near 126-127. That gives PE just below 15x. Judging history, that may come down 10% more. It used to be 150 btw. The decline is about 10% more than usual and presto stocks go down. |
The yardeni data is interesting. I will post link. BUT PEs have been pretty steady since 2000 with exception of 2009. P/S however has been declining for mid and small cap S&P indices - not exactly real small caps as still quite large. So stocks rallied furiously (obviously not as much as large caps over whole period) with revenues keeping pace and PEs only modestly expanding. These record margins we keep hearing about have to be the absorber and they are. SPX500 earnings are at peak margins. Mid and small cap margins are off 1 full percentage point over last decade or so. On mid to high single digit margins, that is not small.
PS. Anyone know a site with PEs by sector or better yet a list of SPX stocks and their PEs?