Today’s Valuations

WANT TO CHECK ON current stock and bond market valuations? Here’s where you can get the latest on some key market yardsticks:

Find out the S&P 500’s price-earnings ratio based on trailing 12-month reported earnings.
Look up the S&P 500’s cyclically adjusted price-earnings (CAPE) ratio. CAPE compares current share prices to average inflation-adjusted earnings for the past 10 years.
See where U.S. stocks are trading relative to the value of corporate assets. This measure of stock market value is known as Tobin’s Q.
Find out the dividend yield on U.S. equity real estate investment trusts. The lowest yield in the FTSE NAREIT index’s half-century history was 2.6%, recorded in December 2021. REIT dividend yields tend to rise and fall along with broad market interest rates.
Check on the benchmark 10-year Treasury note’s yield, a crucial number used to price everything from mortgages to stocks. Based on the difference between that yield and the yield on inflation-indexed Treasurys, you can calculate what inflation rate the financial markets expect over the next decade.
Find out the gap between the yield on high-yield junk bonds and that on Treasurys. The gap tends to be wider when there’s greater concern about the economy and hence the ability of junk-bond issuers to meet their obligations.