CHART OF THE DAY: The Market's P/E Ratio Surges

button more charts
button chart prev
button chart next

In the end, the one thing that matters is how much companies can earn. Q1 earnings came in better than expected largely due to cost cuts, which is unsustainable. Today’s chart, put together by Eddy Elfenbein, compares the S&P 500 to trailing 12-month operating earnings. When the two lines touch, the PE ratio is at 16. As you can see, we’ve now made a severe bounce off the line, so the question is: Is the red line ready to turn up, or will the black line turn back down?

chart, s&p 500 and earnings

Get This Delivered To Your Inbox
You can get this dropped in your inbox every afternoon as The Chart Of The Day. It’s a simple. It’s convenient. It’s free. All we need is your email address (though we’d love your name and state, too, if you’re willing to share it).  Sign up below!


First Name

Last Name


Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.