NDR: Price/earnings ratio at cycle highs

Valuations keep climbing, with several measures hitting new highs (chart above). By late November, the S&P 500 was only 0.6% below its October record, and its P/E based on total earnings reached 26.9. However, the median stock’s P/E, which peaked in September 2024, eased slightly. A similar pattern appears in price-to-sales: total P/S set a new record, while median P/S stayed elevated but closer to trend, highlighting the index’s concentration. The Mag 7 (Or Magnificent Seven, commonly referred to as a group of seven highly influential, high-performing U.S. technology-focused stocks that have driven significant stock market growth in recent years.) show especially high valuations, leaving little room for disappointment if earnings or margins slip. On the sentiment side, the NDR Daily Sentiment Composite recently dropped to a very pessimistic level before rebounding, helping support a potential year-end rally.

Overall, sentiment remains mixed but still leans bullish.

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