The stock market sell-off was deeper than it looked. And that bodes well for a future comeback

S&P 500 price-to-earnings ratio shows the recent drawdown in valuations was deeper than the headline price pullback implied, indicating a compressed P/E. That valuation reset increases the odds of a recovery rally and is constructive for risk-on positioning among investors.

Analysis

S&P 500 price-to-earnings ratio shows the recent drawdown in valuations was deeper than the headline price pullback implied, indicating a compressed P/E. That valuation reset increases the odds of a recovery rally and is constructive for risk-on positioning among investors.