I keep hearing people on financial TV saying the market is at an extreme valuation at 19x trailing 12-month EPS.  As you know from our December Macro Slide Deck, the S&P 500 (SPX) historically trades at an AVERAGE multiple of 19x when core inflation is between 1-3%.  You just have to go back to Q3/16-Q3/18 to find when it traded at least at 19x (Figure 1).


Figure 1 – SPX avg. PE is 19x with low inflation

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