{"id":5738,"date":"2024-07-03T00:02:42","date_gmt":"2024-07-03T00:02:42","guid":{"rendered":"https:\/\/businesstriumphs.com\/index.php\/2024\/07\/03\/sp-500-earnings-results-are-in-for-2024-q1-and-market-is-still-overvalued\/"},"modified":"2024-07-03T00:02:42","modified_gmt":"2024-07-03T00:02:42","slug":"sp-500-earnings-results-are-in-for-2024-q1-and-market-is-still-overvalued","status":"publish","type":"post","link":"https:\/\/businesstriumphs.com\/index.php\/2024\/07\/03\/sp-500-earnings-results-are-in-for-2024-q1-and-market-is-still-overvalued\/","title":{"rendered":"S&P 500 Earnings Results Are In for 2024 Q1 and Market Is Still Overvalued"},"content":{"rendered":"
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S&P 500 earnings are in for 2024 Q1, and here is our valuation analysis.<\/p>\n

The following chart shows the normal value range of the S&P 500 Index, indicating where the S&P 500 would have to be in order to have an overvalued<\/strong> P\/E of 20 (red line), a fairly valued<\/strong> P\/E of 15 (blue line), or an undervalued<\/strong> P\/E of 10 (green line). Annotations on the right side of the chart\u00a0show where the range is projected to be, based upon earnings estimates through 2025 Q1.<\/p>\n

<\/a><\/p>\n

Historically, price has usually remained below the top of the normal value range (red line); however, since about 1998, it has\u00a0not been uncommon for price to exceed normal overvalue levels, sometimes by a lot. The market has been mostly overvalued<\/em> since 1992, and it has not been undervalued<\/em> since 1984. We could say that this is the \u201cnew normal,\u201d except that it isn\u2019t normal<\/em> by GAAP (Generally Accepted Accounting Principles) standards.<\/p>\n<\/p>\n

We use GAAP earnings as the basis for our analysis. The table below shows earnings projections through March 2025. Keep in mind that the P\/E estimates are calculated based upon the S&P 500 close as of March 29, 2024. They will change daily depending on where the market goes from here. It is notable that the P\/E is outside the normal range.<\/em><\/p>\n<\/p>\n

The following table shows where the bands are projected be, based upon earnings estimates through 2025 Q1.<\/p>\n<\/p>\n

This DecisionPoint chart keeps track of S&P 500 fundamentals, P\/E, and yield, and it is updated daily \u2014 not that you need to watch it that closely, but it is up-to-date when you need it.<\/p>\n<\/p>\n

CONCLUSION: <\/strong>The market is still very overvalued and the P\/E is still well above the normal range. Earnings have ticked down, but are projected to trend higher for the next four quarters. Being overvalued doesn\u2019t require an immediate decline to bring valuation back within the normal range, but high valuation applies negative pressure to the market environment.<\/p>\n

Watch the latest episode of DecisionPoint<\/em> on StockCharts TV\u2019s YouTube channel <\/strong>here<\/strong><\/a>!<\/strong><\/p>\n

(c) Copyright 2024 DecisionPoint.com<\/strong><\/p>\n

Technical Analysis is a windsock, not a crystal ball.<\/em><\/strong><\/strong><\/p>\n

Disclaimer:\u00a0<\/em><\/strong>This blog is for educational purposes only and should not be construed as financial advice. The ideas and\u00a0strategies should never be used without first assessing your own personal and financial situation, or without consulting a\u00a0financial professional.\u00a0Any opinions expressed herein are solely\u00a0those of the author, and do not in any way represent the views or opinions of any other person or entity.<\/em><\/p>\n

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Bear Market Rules<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

S&P 500 earnings are in for 2024 Q1, and here is our valuation analysis. The following chart shows the normal value range of the S&P 500 Index, indicating where the S&P 500 would have to be in order to have an overvalued P\/E of 20 (red line), a fairly valued P\/E of 15 (blue line), […]<\/p>\n","protected":false},"author":0,"featured_media":5739,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-5738","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stock"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/5738","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=5738"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/5738\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/5739"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=5738"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=5738"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=5738"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}