May 13, 2023
The S&P 500 Index ended April at 4,169.48, up +1.5% that month, and up just +0.9% from a year ago.
![](https://www.patrickchovanec.com/wp-content/uploads/2023/05/Screen-Shot-2023-05-13-at-10.54.58-PM.png)
The Dow Jones Industrial Average (DJIA) ended April at 34,098.16, up +2.5% that month, and up +3.4% from a year ago.
![](https://www.patrickchovanec.com/wp-content/uploads/2023/05/Screen-Shot-2023-05-13-at-10.55.49-PM.png)
The Nasdaq Composite Index ended April at 12,226.58, flat that month, and down -0.9% from a year ago.
![](https://www.patrickchovanec.com/wp-content/uploads/2023/05/Screen-Shot-2023-05-13-at-10.58.46-PM.png)
As of May 11, the MSCI Global Index stood at 2,809.35, up +0.7% from a month ago, and up +4.0% from a year ago, but still down -13.3% from its peak in January 2022.
![](https://www.patrickchovanec.com/wp-content/uploads/2023/05/Screen-Shot-2023-05-13-at-11.06.59-PM.png)
As of May 11, the CBOE Volatility Index (VIX), which measures expected stock market volatility based on S&P 500 index options, stood at 16.93, down -46.7% from a year ago.
![](https://www.patrickchovanec.com/wp-content/uploads/2023/05/Screen-Shot-2023-05-13-at-11.10.11-PM.png)
The Price/Earnings (P/E) Ratio for the S&P 500, based on 12-month trailing operating earnings, stood at 19.49 for 4Q22, and is expected to rise to 20.44 for 1Q23. With 89.4% of companies having reported, operating earnings per share are expected to be $53.41 for Q1, up +6.0% from Q4 and up +8.2% from the same period a year ago.
![](https://www.patrickchovanec.com/wp-content/uploads/2023/05/Screen-Shot-2023-05-13-at-11.29.38-PM.png)
The Shiller P/E Ratio for the S&P 500, which is based on average inflation-adjusted earnings from the previous 10 years, and is meant to adjust for the whole business cycle, stands at 28.91.
![](https://www.patrickchovanec.com/wp-content/uploads/2023/05/Screen-Shot-2023-05-13-at-11.22.08-PM.png)
According to Prof. Aswath Damodaran of NYU’s calculations, the implied Equity Risk Premium (ERP), based on cash yield, for the S&P 500 was 5.3% at the start of May 2023, down from 5.4% in April and 5.9% at the start of the year.
![](https://www.patrickchovanec.com/wp-content/uploads/2023/05/Screen-Shot-2023-05-13-at-11.17.48-PM.png)
The historical average since 1960 is 4.2%, and since 2002 is 5.0%. (A wider ERP than average suggests expected equity returns are relatively cheaper than bond returns, while a narrower ERP suggests equities are overpriced relatively to risk).
You can find his calculations here:
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