U.S. Central Bank: "Stock Prices Still High Despite Recent Market Adjustments"
Summary
- The U.S. Central Bank reported that asset prices remain at high valuation levels despite recent stock price adjustments.
- The Financial Stability Report assessed that stock prices are high compared to corporate performance forecasts, indicating a risk of further decline.
- It was stated that the 12-month forward PER of the S&P 500 index is higher than the historical average, suggesting a cautious approach.
The U.S. Central Bank (Fed) released a report on the 25th (local time) stating that asset valuations remain high despite recent stock market adjustments.
In the Financial Stability Report released that day, the Fed assessed that "despite the recent decline in stock prices, they remain high compared to market experts' corporate performance forecasts."
The Fed publishes reports twice a year to assess the stability and risk factors of the U.S. financial market. This report reflects market conditions and data up to April 11.
The report indicates that although the recent U.S. stock market has been adjusted, it remains at historically high levels based on valuation criteria considering corporate performance, suggesting a risk of further decline.
According to the Wall Street Journal (WSJ), as of that day, the 12-month forward price-to-earnings ratio (PER) of the Standard & Poor's (S&P) 500 index is 20.47 times. According to JPMorgan Chase, the 30-year average forward PER of the S&P 500 index is 16.93 times, which is lower than the current level.
Seulkee Lee, Hankyung.com reporter seulkee@hankyung.com
Korea Economic Daily
hankyung@bloomingbit.ioThe Korea Economic Daily Global is a digital media where latest news on Korean companies, industries, and financial markets.
