The S&P 500 is extremely expensive. In other words, valuations are in the clouds.
The S&P 500’s current level is reflecting that EPS will grow 12% annually over the coming five years. This is very lofty.
But in case inflation keeps rising from now on and the Federal Reserve turns to a more restrictive policy stance in response,
the EPS would be much lower than 12%. In the worst case scenario, the S&P 500 could be dragged down 22% to 4700.
However, if inflation subsides and moves downwards, the worst case scenario would be avoided.
So, a lot depends on the path of future inflation and no one can predict it with 100% accuracy.
(인플레이션 악화 아닌데요 ===> Yeah, I overstated with just one month of statistics.
I, unconsciously(?), assumed this one month reversal points to a new upward trend.
This assumption has no valid ground. It could turn out to be right or wrong.)