The APP of Zhitong Finance learned that Bank of America Corporation said that although the valuation of the S & P 500 index has declined, it is shown in figure 1.Of the 20 indicators that measure the S & P 500, 14 show that the index is still valued above its historical average.In terms of plate selection, the bank is a firm energy bullish and said it should avoid choosing non-essential consumer goods.

Savita Subramanian, a strategist at the bank, saidThe S & P 500 currently trades at 18.1 times trailing earnings, compared with an average of 12.3 times at the bottom of a historic bear market.In addition, the most bullish indicator of the 2010s turned bearish: the dividend yield on the S & P 500 fell sharply to 0.5 times the 10-year Treasury yield, compared with an average of 0.7 times (the peak during the COVID-19 epidemic was 3.2 times).

"one measure of the attractiveness of stocks is based on the comparison of our standardized ERP bonds," Subramanian said. Assuming that the total cost of capital remains unchanged, a rise in real interest rates to 1.75% (1.2 percentage points higher than today) would bring ERP down to the historical average. "

In terms of plate selectionBank of America Corporation said that although the current price of crude oil has fallen due to falling demand, if Russian crude oil exports contract sharply, Brent crude futures prices will hit $150 a barrel.Therefore, in Bank of America Corporation's strategic framework of 2022, the SPDR energy index ETF (XLE.US) ranks first, while SPDR non-essential consumer ETF (XLY.US) ranks at the bottom.

Subramanian said the retailer's recent performance demonstrated that the trend of consumers moving from non-essentials to necessities posed further risks. In addition, earnings from energy and non-essential consumer goods have historically been negatively correlated, at-53%.