The forward price to earnings ratio of the S&P 500 for 2025 is 22. Historically very high.
Take out the Magnificent Seven? It is only 16, fairly middle-of-the-road. John Mauldin 29 November 2024 https://www.mauldineconomics.com/frontlinethoughts/the-changing-nature-of-the-stock-market S&P 500 clocking 53 records this year — or about one every five days — rampant optimism in the stock market is hardly new. Still, signs of exuberance are starting to appear. Wall Street’s soothsayers expect another year of double-digit gains after the S&P 500 posted back-to-back advances of over 20% in 2023 and 2024. The index has delivered such a rally only once, during the dot-com bubble. Households’ equity holdings as a share of total assets are at a record — and so is a percentage of Americans expecting stocks to rise in the next 12 months. Optimists still see plenty of reasons to keep faith. They point to the healthy broadening of market leadership, with stocks from industries other than technology or AI gradually taking over. And valuations, while stretched, are n...
