Dip buyers, emboldened by years of conditioning, came out in force the last two sessions
The U.S. economy may be growing, but investors have pushed many share prices so far beyond expected earnings that even a 20% plunge would fail to make them obvious bargains.
As recently as November, the Nasdaq 100 index was trading for almost six times the combined sales of its constituents, double the valuation of 18 months earlier and as high as any time in two decades
At 22 times annual earnings, S&P 500 companies were considered expensive at the start of 2020, before the Covid-19 crash hit. Within a year the ratio jumped to 32, nearly twice the historic level.
Even after rallying to end the week, the S&P 500 is still 8.6% below its all-time high set in January. Richly valued technology shares -- the stock market’s pandemic darlings -- are down more than 14% from their peak.
Katherine Greifeld Bloomberg 26 February 2022
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