Friday the 13th was a lucky day for stock bulls. On Thursday, the S&P 500 was down 18.1% from its record high on January 3. It was on the edge of a bear market (defined as down 20%-plus from the most recent high).
The index rose 2.4% on Friday. So it is down 16.1% since January 3, a bit further away from the edge.
The forward P/E fell to 16.7 on Thursday and rose to 17.1 on Friday. Using the current forward earnings per share of $235 per share, we can derive the stock price index at various P/Es: 18 > 4230, 17 > 3995, 16 > 3760, 15 > 3525, 14 > 3290, etc. We are currently expecting 16 to hold (as it did on Thursday) rather than to fold.
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