Top 4 charts to follow in 2021: #2: SP500 earnings

The Spotlight

1 minute read

Dec 21, 2020

wooden S&P 500 stock market index of the largest companies listed on stock exchanges in the US

The chart shows the growing divergence between the value of the S&P500 companies and their earnings. Will 2021 mark the end of this divergence? Time will tell.

This chart shows the S&P500 index versus the earnings of S&P500 companies.

growing divergence between the value of the S&P500 companies and their earnings

Here, we can clearly see the increasing divergence between the value of the S&P500 companies and their earnings.

This would reinforce the narrative that the equity market has been driven by central bank liquidy rather than their underlying fundamentals.

Will 2021 mark the end of this divergence?

The answer to this question is what makes this chart one of the 4 to follow in 2021.

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