1.S&P Forward P/E Multiple Above 20
It is difficult to think about the E in the P/E ratio when the economy is shut down and half of blue-chip companies don’t want to provide guidance on full-year earnings because of all the uncertainty. The Fed probably doesn’t worry much about if the forward multiple is 18, 20, or 25, their clear goal is to support markets at least as long as we are in lockdown and maybe until the unemployment rate has moved into the single digits again. With this backdrop the chart below isn’t particularly helpful if one wants to understand if stocks are going up or down from here. For more see also here and here, and also here.
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Torsten Sløk, Ph.D.
Chief Economist
Managing Director
Deutsche Bank Securities
