The S&P 500’s average price-to-earnings ratio of 16.8 for August was the lowest since November 1995, according to monthly data compiled by Bloomberg. And, "all 10 industry groups in the S&P 500 are valued at a discount to their historical average over the last 10 years."
Could be. But, it is simply data, and its says nothing by itself. If the home lending problems spread further into the economy or it credit card default rates rise, the market may not look cheap. If oil stays above $74, the consumer may slow purchase of big ticket items like cars. The Michigan Consumer Survey poll numbers are expected to fall in August.
The market may look inexpensive. But, that’s on paper.
Douglas A. McIntyre