Does that mean they will keep going up?
The S&P 500 trades at 18.8 times earnings over the past 12 months, a basement valuation that is lower than the market’s February trough, when the index’s valuation was around 19 times earnings, according to FactSet. At the S&P 500’s peak in January, the index traded at nearly 22 times earnings.
Strong corporate earnings are making stocks look less pricey than they did before. Companies in the S&P 500 have posted double-digit profit growth for the past three quarters to help earnings catch up with the S&P 500’s 6.7% advance this year. For the latest quarter, profits are on track to register a rise of 25% from a year earlier, one of the fastest rates of earnings growth since 2010, according to FactSet.