"S&P Is Egregiously Expensive": BofA Finds The Market Is Overvalued On 20 Out Of 20 Metrics, But...

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by Tyler Durden
Thursday, Feb 29, 2024 - 11:45 PM

Well, we've finally hit the peak: according to Bank of America's weekly Relative Value Cheat Sheet, the S&P 500 is expensive on 20 of the 20 metrics the bank uses to check on relative valuation (and is statistically expensive on 19 of the 20 metrics it tracks) and is trading at its 95th percentile based on the first metric, Trailing PE, based on data since 1900.

And even though Bank of America notoriously flip-flopped in mid-2023 from a mega bear to one of the most US equity vocal bulls, the bank's chief equity strategist Savita Subramanian admits in her latest report (available to pro subs) that "the S&P 500 is egregiously expensive vs. history", and notes that "it’s hard to be bullish based on valuation" even as she tactically adds - because at roughly the same time she revealed her latest market outlook which sees a summer rally in the S&P and an upward revised price target of 5,600 - the typical bull disclaimer that record overvaluation "shouldn't keep you up at night", although it wasn't immediately clear what, if anything, should. We are confident that that whatever it is, Savita would promptly tell us.