Valuation update

As of the latest summer update, the S&P 500 is trading at 21.2 times forward 12-month earnings, which is 1.1 standard deviations above its 10-year median. Among the sectors, Information Technology stands out as the most expensive, with the sector trading at 9.3 times sales. On the other end of the spectrum, the Energy, Financials and Utilities sectors appear to be the most attractively valued in terms of their price-to-earnings (P/E) ratios. While valuation metrics like these are not precise indicators of short-term market movements, they are valuable tools for assessing long-term investment potential. Historically, higher valuations have been associated with lower future returns, while sectors with lower valuations may offer better opportunities for long-term gains.