After the equity rally, P/E multiples are back at around 16x 2021 consensus earnings; any advances from here are probably much less one-directional given what still lies ahead, even after $8 trillion in asset purchases, loan guarantees and direct lending from the Federal Reserve. In Europe, the latest antibody tests show large numbers of unreported infections, which could signal an earlier increase of herd immunity than you might think.
Line chart displaying the S&P 500 index level since January 1st 2020. The index bottoms around March 23rd, when a change in the second derivative of infections occurred in Italy and NYC, when the Fed enacted policy changes, and when short interest on the SPY ETF reached peak levels. The index has since rebounded, but has not reached pre COVID-19 crisis levels.
