SPX 10-Year Forecast: Deeply Negative Real Returns Expected (SPX)

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US large cap equity valuations have moved back to their most extreme levels on record barring the 1990-2000 and the 2021 peaks. Based on an average of the most reliable valuation measures going back to 1991, the S&P500 trades at multiples consistent

Implied Forward Annual Real Returns R-Squared Log Scale
Price / Earnings 3.1 0.46
CAPE 1.0 0.84
Price / Dividend 0.9 0.65
Price / Forward Earnings 0.0 0.75
EV / EBITDA -2.5 0.73
Price / Book Value -2.8 0.90
Price / Sales -3.2 0.54

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