Up to 9/18/2009, over 99% of S&P 500 companies have reported for Q2 2009. Based on Friday's closed price 1068, S&P500 Operating P/E = 27, and Reported P/E=142. Yes, it is 142, not 42.
SPX goes down to 1069 from record high 1576, why PE gets more than tripled. The reason is our earnings declined too much. The chart provides some long-term perspective to the current earnings by focusing on 12-month, as reported S&P 500 earnings. The chart illustrates how earnings declined over 92% since peaking in Q3 2007, the largest decline on record since we started to track the data back to 1936. It took us 70 years to get to the high and only 2 years back to the start point, and even lower.
How soon do you think we can climb back from this nosedive? If you ever played cliff climbing, you know the answer.
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