The S&P 500 is now more overvalued than ever, per this measure The S&P 500 index SPX, -0.29% is trading at 18.6 times forward earnings.
Price relative to sales for the S&P 500 is at a record high, “well in excess of what they were in 2000 or 2007 at those peaks”.
The median price to earnings ratio — which exclude the skewed effects of very profitable and very unprofitable companies — shows the S&P 500 overvalued by nearly 30% versus the typical valuation level seen since 1964.
Looking at the ratio of market valuations to overall profits suggests “P/E ratios are some 80% above the long-term norm”.
The average dividend yield for S&P 500 stocks is at 2%, according to FactSet data, above the 10-year U.S. Treasury note yield of 1.87%.
Typically, the S&P 500 dividend yield trades 20% below the 10-year yield, he said, suggesting that relative to interest rates, the stock market has more room to run.
Source: Market Watch
https://www.marketwatch.com/story/the-s ... ck_seemore