Source: Business Insider
Traders are paying the most relative to the S&P 500’s price/earnings-to-growth ratio in more than three decades, Bank of America wrote in a Thursday note. Bank of America began tracking the PEG ratio in 1986, and the index’s current ratio of 1.8x is the highest the bank has observed. The S&P 500’s price-earnings ratio recently hit its highest level since 2002 at 18.6x. The US market “is running on fumes,” BofA strategist Savita Subramanian wrote, and stocks could see “multiple compression” before the year is out. Visit the Business Insider homepage for more stories. US stocks are the most overvalued they’ve been in at least three decades judging by their price/earnings-to-growth ratio, according to Bank of America . The S&P 500’s PEG ratio sits at an all-time high of 1.8x, the bank’s analysts wrote in a Thursday note, adding that they only began tracking the measurement in 1986. A PEG ratio above one typically means a stock is overvalued relative to its long-term earnings growth expectation.