The enclosed chart (click on chart to enlarge) shows that the PE ratio rises (and stocks are strong) when short-term interest rates are stable or declining.
The PE ratio declines, and stocks are weak, when short-term interest rates rise.
The bottom line is that it pays to be bullish when short-term interest rates are stable or decline as it is happening now.
More on www.peterdag.com
George Dagnino, PhD
Editor, The Peter Dag Portfolio on www.peterdag.com
since 1977
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