Forgetting yields

The S&P 500 P/E has moved up despite the increase in yields. The disconnect from rates has been one of the big conundrums in 2023. Let's look at some charts, and then some possible explanations and lastly if the reversion actually now has started.

Source: Goldman

The crocodile gap

Source: Refinitiv

Cyclicals de-coupled

Source: JPM Equity strategy

Value de-coupled

Source: Goldman

Why the massive disconnect?

1 - We have passed the magic level

Source: Sanford Bernstein

2 - AI is the answer...

Source: Goldman

3 - Bad news is good news now, but only up to a point

Source: Macrobond

4- Maybe it was just one of those "glitches"?

Source: Refinitiv