The S&P 500 Technology sector forward P/E to that of the SP500 is not as expensive as it was during the Internet bubble
However, the PEG ratio (forward PE divided by consensus long-term EPS growth rate) is roughly at the same level. Source: Game of Trades
The SP500 is now 5% higher than where it was when the Fed started hiking rates in March 2022. $SPX
Source: Charlie Bilello
With 46% of companies reported, S&P 500 Q2 GAAP earnings per share are up 7% over the last year, the highest YoY growth rate since Q4 2021.
Source: Charlie Bilello
It has never been cheaper to hedge against a market crash
According to Bank of America's derivatives strategists, it has never cost less to protect against an #sp500 crash drawdown in the next 12 months. Why is the cost of longer-dated S&P protection at record lows today? The most common explanations are a mix of fundamentals (e.g. a recession, if it materializes, will be short-lived and shallow; or, realized correlation is too low to warrant higher implied correlation) and vol technicals (e.g. the supply of vega on US underlyings for yield remains robust; or, due to the rise of short-dated option selling, the next shock will likely be a “gamma event” in which systemic tenors of risk don’t react strongly). Source: BofA, www.zerohedge.com
S&P 500 hits fresh 52-week high while the Dow heads for 13th straight daily gain as markets hope that the US interest rate hikes cycle is over.
The Fed just said they are taking a "meeting by meeting" approach to future interest rate policy. As expected, the Fed raised interest rates to the highest level in 22yrs as expected and left the door open to additional increases as officials fine-tune their effort to further quell inflation. The quarter percentage-point hike, a unanimous decision, lifted the target range for the Fed’s benchmark federal funds rate to 5.25% to 5.5%, the highest level since 2001. It marked the 11th increase since March 2022, when the rate was near zero. Source: Bloomberg, HolgerZ
S&P 500 Forward Earnings Yield
The S&P 500 equity risk premium hit the lowest level in two decades, which will be a headwind for longer-term returns. Source: The Daily Shot
The disconnect between Fed net liquidity (grey) and the S&P 500 (purple) is growing by the day
source: Markets & Mayhem
Energy is the least expensive sector in the S&P 500 but generates the most cash.
Perhaps this explains why Warren Buffett continues to increase his position in Occidental Petroleum - source; Barchart, Bloomberg
