Valens Market Phase Cycle Monitor – April 2026 – In A Growth Market, Wait A Bit And High P/Es Become Cheap
April 16, 2026
- In A Growth Market, Wait A Bit And High P/Es Become Cheap. As we roll our Uniform Accounting data to 2026, strong earnings growth and positive earnings revision mean the market’s Uniform P/E ratio now sits right around 20x, which is below what we’d expect for this environment.
- Investors Sentiment Is Pessimistic Just As Growth Accelerates. Uniform Earnings grew a strong 8% in 2024 and 2025, and they are expected to increase at high teens rates across 2026 and 2027, driven by significant reinvestment, margin improvement, and long-term capital projects. Businesses are starting to fund capital expenditures with debt, accelerating investment potential, with particular focus on productivity-enabling technologies like AI, data centers, and supply chain modernization.
- Credit conditions are improving. Banks are slowing down their tightening, credit spreads remain historically tight, and C&I demand is rising. Credit creation may accelerate further this year, fueling incremental growth and investment activity.
- Sentiment concerns have dissipated. With the multi-month stall in the market, many investor sentiment indicators have moved to neutral or even negative levels, offering a floor to a market pull-back barring a material shock.
- Monthly inflections:
- Credit (55% of macro outlook): Positive (no change)
- Earnings Growth (30%): Positive (no change)
- Momentum/Sentiment (10%): Neutral (no change)
- Valuations (5%): Positive (upgrade)
- Timetable Recommendation: 50% Equity/50 Bond Split for 5-10 Year Money and 5 Month Dollar Cost Averaging.