May 2003
Growth-free profits cast a pall over recovery hopes
Now that the military battle in Iraq is over, my
sense is that equity markets want to go up. But I don't
believe that this is the start of a new bull market. It is
just the eye of the storm of the secular bear market. The
bounce will eventually die down and the bear market will
reassert itself. We have not seen the lows yet.
The market will ignore valuations for now. These remain stretched.
I estimate the S&P500 to be selling on 18 to 19 times this
year's earnings. On a multiple of dividends, US equities are
absurdly expensive - and dividends count these days. I trust
dividend multiples more than P/E ratios because the manifold
definitions of profit floating around throw up too many conflicting
messages. But the Nasdaq is outperforming the broader indices. That
means two things are clear: the market wants to go up and it
doesn't give a toss about valuations for...
This is archived content. Your current settings does not currently allow access to the archive. To gain access visit the subscription page or call our hotline on +44 (0)207 779 8999.
If you are a trialist or subscriber, please enter your username and password at the top right-hand side of euromoney.com
Subscribers to Euromoney benefit from:
Level 1:
- Online access to the past 12 months content
- Tailored RSS news feeds direct to your desktop
- News delivered directly to your mobile device or PC
- Personalised email newsfeed of 'Top stories' and 'Breaking news'
Level 2:
- Exclusive access to euromoney.com - Read the latest issue early online, search for specific developments by region or sector, interrogate the results of Euromoney's benchmark polls, and view the archive dating back to 2000
- 12 monthly issues of Euromoney magazine
- More than 30 specialist research guides free
- The results of Euromoney’s polls and surveys
- Tailored RSS news feeds direct to your desktop
- News delivered directly to your mobile device or PC
- Personalised email newsfeed of 'Top stories' and 'Breaking news'
Click here to subscribe