S&P500 level and PE ratio
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjQOVgonzYNeqrODjg16shN3HfFR-sR2FEQh7wFggGT9Oz-qk5dGylKZHin81R6NV4jWI_82SIuQtSBkbsKhFp3SAxbYQWje28Ak9Yyen2YGBV_JZAGptgHFuj5vRIGWi4rYpstRzJ05NKB/s400/PE.gif)
But that's not at all true for credit. In spite of the massive rally we've experienced, investment grade corporate credit spreads are around 390 bp vs. pre-crisis levels of just above 100 bp. Equities are now looking completely overpriced relative to credit.
JPMorgan blended corporate investment grade spread
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhmNhM5N0FntKx0DVf9PIiADGQqTMGzTp_ST2hFmBQVzlaQOh8zllITEQuf-mI2kltswsb4WDwcT5Ep1IFwMSNc1tXPebpDg9y-qpqdVP1Per4reB-IlMcVCGGGVKwk7_Iz6TTRNw4hZWhL/s400/IG.gif)
Update: some are questioning Bloomberg's estimated PE number. Here is an estimate from S&P as a comparison (consistent with Bloomberg's estimate of 16) - see page -2:
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