Is the April PE rebound running on fumes?

Stock valuations have bounced back strongly this month. But with the profit outlook still opaque and more downward revisions likely, forward PEs offer only a hazy reading of current market values.

Propelled by the April relief rally, forward PE multiples have regained much of the ground lost in the global market meltdown in March. But with the drop in stock prices since the February peak outpacing the decline in underlying earnings forecasts—and the profit outlook still murky—this valuation re-rating appears to be on a shaky footing.

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