View on U.S. stock market (S&P 500) Discussion (2) Notable ISM Index

（A）Views on U.S. stock market (S&P 500) (1)I wrote that the basics are corporate earnings.

When approaching corporate earnings from macro data,

(A) ISM index

(B) Raw material price index (CRB commodity price index and producer price index, etc.)

(C) Industrial production

(D) It’s a bit esoteric, but shipment-inventory balance

and others are used.

（B） The most popular isthe correlation between the S&P 500 EPS year-over-year growth rate and the ISM.

Therefore, from (A) and (B), look at the correlation between the S&P 500 year-over-year growth rate and the ISM.

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Please skip this part.

When estimating stock prices, there are two methods: (1) estimating the level of stock prices, and (2) estimating the change in stock prices.

(1) is, for example, approached by EPS and an appropriate PER, i.e., EPS × PER. The fair stock price is estimated directly.

(2) is, for example, estimating the year-over-year growth rate of stock prices with the ISM index. In this case, the stock price level is not estimated directly; the focus is on the growth rate of stock prices.

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