Posted 1/23/2024, 1:25:00 AM
S&P 500 Sector Valuations Over Time: Tech Learned Lessons While Consumer Remains Stretched
- Table shows S&P 500 sectors' market cap weight vs earnings weight over time, providing perspective on valuation
- In late 1990s, tech sector market cap dwarfed earnings weight, signaling bubble that burst in 2000
- Today, tech market cap is 30% of S&P 500 vs earnings weight of 23%, more reasonable ratio
- Communication services earnings outweigh market cap while consumer discretionary market cap leads earnings
- Though not as extreme as 1990s, some sector market cap vs earnings ratios show stretches; worth monitoring