The Royal Bank of Canada's capital market analyst said that if macroeconomic pressures continue to exist, the S&P 500 index may fall below the 5,000 point threshold. The investment bank emphasized that the current price-to-earnings ratio (P/E) of the market may decrease in the long-term inflation pressure and the lack of expectations for interest rate cuts by the Federal Reserve. Based on the general predictions of economic variables, the Royal Bank of Canada's basic model indicates that by the end of 2024, the price-to-earnings ratio of the S&P 500 index should be around 21.5 times. If their forecasted earnings per share (EPS) of $237 in 2024 is accurate, then the index may reach 5,100 to 5,300 points. However, under stress testing, considering the Federal Reserve not cutting interest rates, inflation higher than expected, and the 10-year US Treasury yield not exceeding 5%, the price-to-earnings ratio may decrease to 20.8 times, pushing the S&P 500 index down to the range of 4,900 to 5,100 points.

On May 18th, Liu Chenming, Chief Strategy Analyst at GF Securities, said that the investment focus in A-shares has shifted from EPS to dividend and share buybacks. He pointed out that the long-term stock price annualized return and increase should be approximately equal to the EPS growth rate plus dividend and share buybacks, as EPS is the numerator of ROE and dividend and share buybacks are the denominator. In the UK and the US, stock price performance tends to be closer to ROE. From an investment perspective, in the context of A-shares, the previous focus was on the numerator, but now people are focusing on the denominator. This discussion is not only about dividend yield, but also about the industry landscape. It needs to be applied to capital expenditure and cash flow observation, which involves a series of logical reasoning.