No. of Recommendations: 14
In the five US recessions since 1980, on average stock market valuations have gone from 16 to 11 times forward earnings, always ending no higher than 14x.A search turns up several charts of S&P 500 Forward P/E ratio. The longer term trends look more significant. For example:
S&P 500 Forward P/E ratio
increases to peak of 24 around 19991231
decreases to trough of 10 around 20081001
increases to peak of 22 around 20201231
am.jpmorgan.com - Gtm forwardpeGTR1 can calculate a S&P 500 Forward P/E ratio. This shows a similar curve with peaks in 1999 and 2021, and a trough in 2008:
Date PE
19991230 25 peak
20081121 9 trough
20210111 23 peak
PE did not change much during the 3 recent recessions, but Forward Earnings Estimates did:
month Earnings MktCap PE Recession Dates
200102 0.56 11.07 19.9 Early 2000s March 2001 – November 2001
200112 0.47 10.02 21.1
change -15% -9% 6%
200711 0.95 13.25 14.0 Great December 2007 – June 2009
200907 0.66 8.40 12.6
change -30% -37% -10%
202001 1.54 28.32 18.3 COVID-19 February 2020 – April 2020
202005 1.37 25.10 18.4
change -11% -11% 0%
Year end values:
Date [sumE] [sumMC] [EY] PE decreasedE decreasedMC
20250414 2.66 47.03 5.7% 18 --- TRUE
20241231 2.44 52.03 4.7% 21 --- ---
20231229 2.15 41.91 5.1% 19 --- ---
20221230 2.01 33.61 6.0% 17 --- TRUE
20211231 1.97 42.39 4.7% 21 --- ---
20201231 1.47 32.99 4.4% 22 TRUE ---
20191231 1.53 27.82 5.5% 18 --- ---
20181231 1.52 21.64 7.0% 14 --- TRUE
20171229 1.29 23.78 5.4% 18 --- ---
20161230 1.19 20.17 5.9% 17 --- ---
20151231 1.16 18.95 6.1% 16 TRUE TRUE
20141231 1.17 19.09 6.1% 16 --- ---
20131231 1.12 17.11 6.6% 15 --- ---
20121231 1.06 13.02 8.1% 12 --- ---
20111230 1.01 11.84 8.6% 12 --- ---
20101231 0.90 11.65 7.7% 13 --- ---
20091231 0.71 10.33 6.9% 14 --- ---
20081231 0.69 7.87 8.8% 11 TRUE TRUE
20071231 0.94 13.41 7.0% 14 --- ---
20061229 0.88 13.05 6.7% 15 --- ---
20051230 0.80 11.54 6.9% 14 --- ---
20041231 0.69 11.19 6.1% 16 --- ---
20031231 0.58 10.22 5.6% 18 --- ---
20021231 0.50 7.72 6.5% 15 --- TRUE
20011231 0.49 10.52 4.7% 21 TRUE TRUE
20001229 0.52 11.00 4.7% 21 --- TRUE
19991231 0.47 11.48 4.1% 25 --- ---
19981231 0.42 9.51 4.4% 23 --- ---
19971231 0.38 7.09 5.4% 19 --- ---
gtr1.net: GTR1 Backtester - SP500_PEforward
