Earnings Track Prices: The S&P 500

Stock prices track earnings. Here is a graph of the S&P 500 plotted against earnings for the index firms. Though not perfect, the correlation is strong.

This graph is from the Yardeni Research website at https://yardeni.com/charts/sp-500-earnings-the-economy/ where a number of other graphs tracking earnings against GDP and economic indicators are also available.

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