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Historically, price has usually remained below the top of the normal value range (red line); however, since about 1998, it has\u00a0not been uncommon for price to exceed normal overvalue levels, sometimes by a lot. The market has been mostly overvalued<\/em> since 1992, and it has not been undervalued<\/em> since 1984. We could say that this is the “new normal,” except that it isn’t normal<\/em> by GAAP (Generally Accepted Accounting Principles) standards.<\/p>\n

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We use GAAP earnings as the basis for our analysis. The table below shows earnings projections through December 2025<\/u>. Keep in mind that the P\/E estimates are calculated based upon the S&P 500 close as of March 31, 2025<\/u>. They will change daily depending on where the market goes from here. It is notable that the P\/E remains outside the normal range.<\/em><\/p>\n

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The following table shows where the bands are projected be, based upon earnings estimates through 2025 Q4<\/u>.<\/p>\n

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This DecisionPoint chart keeps track of S&P 500 fundamentals, P\/E and yield, and it is updated daily — not that you need to watch it that closely, but it is up-to-date when you need it.<\/p>\n

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CONCLUSION: <\/strong>The market is still very overvalued and the P\/E is still well above the normal range. Earnings have ticked up and are projected to trend higher for the next four quarters. High valuation applies negative pressure on the market, but other more positive factors can keep the market in overvalued territory. The current bear market has brought the market to a less overvalued status, but there is still a long way to go to more normal valuation.<\/p>\n

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