Valuation 06.25.2014
We are getting ready to end the second quarter of 2014 and are on the cusp of the 4th of July holiday. Next week officially kicks off Wall Street's summer season. For the rest of the US, July 4th is a sad reminder that summer {as measured by the kid's vacation season} is half over. In fact in some places, its more than half over as school in many parts of the country now starts in mid-August.
Time to take a look at valuations in the market. As of this writing the S&P 500 is trading at 1,950. The S&P 500 has tacked on about 3% since we last looked at valuations on May 21.2014.
Our Midpoint S&P 500 Earnings Estimate of $118.75 {Through 12.31.2014}
Current PE: 16.42
Earnings Yield: 6.08%
Dividend Yield: 1.82%
Current PE: 15.84
Earnings Yield: 6.31%
Dividend Yield: 1.86%
Current Expected Price Cone of Probability, 06.25.2014: 1,700-2,100.
The current yield on the 10 year US Treasury is 2.58%.
The Cone of Probability is our current assessment of the trading range within which we think stocks have the potential to trade during the described time period. It is a probabilistic assessment based on a many factors. Some of these inputs are: Earnings estimates, also are those estimates rising or falling, dividend yield, earnings yield and the current yield on the US 10 year treasury. This is not an exhaustive list of all of the variables that are used in creating the cone. The Cone of Probability is used solely for analytical purposes. It will fluctuate with market conditions and changes to the data inputs. Index prices can and have traded outside of the range of the cone. The data supplied when we discuss the cone is for informational use only. There should be no expectation that this price range will be accurate and there are no guarantees that this information is correct.
*Long ETFs related to the S&P 500 in client accounts, although positions can change at any time.
posted by CR English at 9:25 AM
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