Market Overview - April 2021

For only the third time since 1989, the S&P 500 Index ended 2020 higher at the end of a calendar year compared to its closing price from the previous calendar year – while full year earnings were negative during the same period. Previous occurrences took place in 1991 and 2007. Notably, the S&P 500 Index P/E multiple ended at 14.6 in 1990 and 16.2 in 2006. By comparison, the Index P/E multiple ended 2019 at 20.6. The combination of negative EPS and a sharply increased Index price led to a closing P/E multiple of 31.1 at the end of 2020 – the highest ending level recorded during this 32 -year period of strong economic growth.