The SPX volatility so far this year shows some uncertainty over 'fair value'. Based on 2018 earnings estimates from Factset of 160 earnings/share for the SPX, if we divide 160 by the current SPX price the chart reflects what's known as the 'earnings yield'. Shown inversely it is known as the forward P/E ratio.
So far this year the SPX earnings yield has ranged over 60 basis points between extremes of 5.6% and 6.2%. The 50 day average currently suggests an equilibrium of approximately 6% earnings yield for 2018.
So far this year the SPX earnings yield has ranged over 60 basis points between extremes of 5.6% and 6.2%. The 50 day average currently suggests an equilibrium of approximately 6% earnings yield for 2018.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.