SeekerBlog

It might be — though this is a rear-view-mirror perspective. The trailing P/E could turn out to be tiny in relation to the future actual P/E. I’ve heard several credible forecasts of S&P 500 earnings in the $60 to 70$ range vs. recent consensus forecasts of $95.

But equity markets generally bottom before the indicators turn positive.

Here’s the specifics on this data series:

This metric was created by dividing the PE ratio of the S&P 500 by the price the market will pay for a dollar of long term treasury yield (expressed by 1 divided by the 10 year treasury return.) Numbers indicate the % by which people will pay more or less for S&P earnings versus treasury interest dollars. Thanks to Peter C. for recommending this chart.