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Bob Carey
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  Large-Caps are not expensive on an historical basis
Posted Under: Broader Stock Market
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View from the Observation Deck

  1. The estimated price-to-earnings (P/E) ratios in the chart above are considerably lower than their respective averages (actual earnings) over the past 20 years, with utilities being the exception. 
  2. With S&P 500 12-month earnings hitting an all-time high of $94.64 in Q3'11 ($97.06 Estimate for Q4'11), it is the P in P/E that is lagging. (Source: S&P) 
  3. The S&P 500 will begin Monday's trading session approximately 16% below its all-time high of 1565.15 on 10/9/07, not long after the S&P 500 posted a 12-month earnings record high of $91.47 in Q2'07 .
  4. On 1/25/12, the Federal Reserve stated it plans to keep the federal funds rate as is through 2014 if necessary. That is a pro-growth posture and a positive for equities.
  5. S&P is estimating that the S&P 500's earnings will rise to $105.78 in Q4'12.
Posted on Monday, January 30, 2012 @ 8:00 AM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
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