There is a non-linear relationship between bond yields and the market PE (see enclosed graph -- click on the graph to enlarge).
The PE for the S&P 500 is now 18. A PE of 18 reflects a relatively inexpensive market with yields on the 10-year bonds at less than 5%.
More on www.peterdag.com
George Dagnino, PhD
Editor, the Peter Dag Portfolio on www.peterdag.com
Since 1977
1 comment:
I guess you have to ask how the low bond yield squares with the ever accelerating commodity prices in USD, and the tight labour market.
Post a Comment