Eddy Elfenbein submits: Here's a look at the P/E Ratios of the ten sectors of the S&P 500:
The P/E ratio of the overall S&P 500 is about 16.2. This is slightly distorted due to the low P/E ratio of the energy sector (9.6% of the index).
Since energy stocks have been generating very healthy profits, and the market doesn’t believe the good times will last, or least, not at this pace, that gives them a low P/E ratio. That's pretty common for cyclical stocks. Ignoring energy, I see that five sectors have P/E ratios greater than 18.7.
Here’s a look at each sector’s Relative P/E Ratio, which is their P/E compared with the overall S&P 500.
Although Relative P/E's are far from perfect, they're a good measures of value. You can see that only the cyclical sectors like energy and industrials show any noticeable downtrend. Even though tech stocks haven’t done very well, by this metric, it doesn’t appear that tech has become any less expensive.