In the last few weeks the estimates for 2013 earnings for the S&P 500 have come down slightly based on a poll of a number of analysts. This is never a good thing, however even with lowered expectations the market is trading at extremely attractive levels based on historical numbers.
The consensus estimate for 2013 is $113 in earnings for the S&P 500. Based on today's closing price the index is trading with P/E ratio of 12.37 using the estimate. The current 2014 estimate is for earnings to jump into the mid-$120's. Anyway you slice it, the market is CHEAP based on the futures earnings estimates.
The key word here is "estimates". The number can change dramatically if the US falls off the fiscal cliff or if Europe goes deep into a double dip recession. But, even if 2013 drops to $105 in earnings, the S&P 500 is still only posted a P/E ratio of 13.31.
THE BOTTOMLINE: Stocks are cheap if you are a long-term investor.
Market expert and TV personality Matt McCall blogs about what is really moving the markets. He will emphasize Exchange-Traded Funds (ETFs) and individual stocks throughout the trading day.
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