Lost in the shuffle of this surge higher for the market is the quickly expanding P/E ratio of the S&P 500. Â As shown below, the S&P's trailing 12-month P/E is currently at 15.25, and it will increase even more once the market opens this morning. Â Valuations can certainly expand during rallies, but it's just something to be aware of here with all the news focused on the push to all-time highs.
Below are one-year charts of the trailing 12-month P/E ratios for the ten S&P 500 sectors. Â You can see which sectors have impacted the S&P's expanding P/E ratio the most. Â These include Health Care, Industrials, Consumer Staples, Consumer Discretionary and Utilities. Â The two consumer sectors are really seeing their valuations tick higher recently. Â On the other hand, Financials, Energy, Materials and Technology have yet to see their P/Es break out to new highs.
