The S&P 500 set a record high close of $3,153.63 on Nov. 27, 2019. This has been accompanied by multiple expansion. Today’s forward four-quarter (F4Q) EPS estimate of $171.85 places the current F4Q P/E at 18.3. This is well above the 50-year average of 14.8. While the current level may look alarming relative to this figure, the chart above shows a choice of duration matters, because it isn’t as elevated relative to the 30-year (17.1) and 20-year (17.2) averages. Going forward, investors will be watching to see if the S&P 500’s F4Q P/E will break above the 18.9 high (since Jan. 1, 2016), which was set on Dec. 18, 2017.

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