Citi’s PULSE: Despite Euphoria, Investors Dumping Equities

The March 28, 2014 issue of PULSE Monitor by Citi analysts Tobias Levkovich, Lorraine Schmidt and Christina Wood shows Price and Earnings as positive factors but tending towards neutral. While Liquidity and Unanticipated are in neutral territory, Sentiment still reigns at high levels despite the recent sell-off. Valuation The S&P 500 (INDEXSP:.INX) is trading at a 16.79X P/E multiple based on the trailing four-quarter S&P 500 operating EPS. Historically, and as shown in the bull’s-eye graphic below, this multiple would fall in the 16X-18X band, indicating the likelihood of an average 5.9% return over the subsequent 12 months. “Our earnings yield…