The Weekly Update 10/09/2026™
Created by Jim Lunney, CFP®
YES!
Stocks Are Getting Cheaper as Earnings Outpace Prices.
The valuations of Corporate America, as measured by the S&P 500, are now less expensive than six months ago. The S&P 500 earnings are up +24.90% year-to-date (YTD), after the first two quarters. The S&P 500 index is up +12.10%.
The price-to-earnings (P/E ratio) is a measure of risk and is based on the earnings versus the price, the P/E now rests at 17 x.
For reference the 10 yr average is 20.50 x.
The now 17 x P/E is a 20% discount to the 10 yr. average.
At a time where the earnings for Corporate America are estimated to grow at +27% over the next 12 months.
This may be too simple, but this is how I read these two facts are this:
- a 20% discount in P/E versus 10yr average
- 27% forward earnings growth
suggest the valuations of Corporate America as measured by the S&P 500 are -47% below average (Sources on EPS: Yardeni Research 9-24-2026)
Today, October 8, 2026 the S&P 500 trades at 7,800.14. The debit above suggests a true value closer to S&P 500 of 11,154 by year end 2027.
That 11,154 is just to the average 10 yr P/E based on The Yardeni forward earnings. So it could possibly be higher if EPS are higher and or if the P/E trades above the 10 yr. Average.
No matter how you choose to measure, the outlook is reasonably, to unbelievably, good.
Just FYI, that huge and profitable jump in profits over revenue is driven by the productivity created by technology and artificial intelligence (A.I.) advancing into the systems and processes of Corporate America.
And yes, Corporate America is allowed to create value, make money and create bigger financial futures for all of us who choose to ride shot gun as investors. Glad we are on board.
You have a choice to have “Faith In” or “Fear Of” …The Unknown. You know my choice!
As always, your WSG team remains focused, thoughtful, and on purpose as we continue the ongoing process of allocating The WSG client family assets entrusted to our oversight.
I did not say market valuations go straight up, and I did not say without volatility, yet the data flow suggests the good old USA has a very bright outlook.
P.S. I write and post The Weekly Update every Friday versus emailing so I don't fill-up the client family's email inboxes. If you'd like to read them each Friday, just go to TWSG website at https://www.wealthstratgroup.com. Once there, click on my photo and it takes you to my investment philosophy and methodology page. In that verbiage are green hot links to The Weekly Updatelibrary as well as the library for the monthly piece I write and e-blast each month, The Seven Signs of a Changing Economy.™
Thank you for your trust and confidence. As always, I am interested in your thoughts, comments, and observations. Feel welcome to call, email or stop by the office and say Hi.
Respectfully,
James O. Lunney, CFP®
CERTIFIED FINANCIAL PLANNER™ Professional
The Wealth Strategies Group
7761 Shaffer Parkway, Suite 100
Littleton, CO 80127
Ph. 303-933-2107 Fax 303-933-7175
*The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. Investing involves risk. Loss, including loss of principal, may occur. No strategy assures success or protects against loss. All performance referenced is historical and there is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
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