Is the CAPE covering up the true valuation of the S&P 500?

Although the S&P 500 has now risen by well over 20% this year following a further surge this week, Shiller’s widely-watched cyclically-adjusted price/earnings ratio (CAPE) for the index has only edged up by 5% despite anaemic growth in earnings per share (EPS). By contrast, 12m trailing and expected price/earnings ratios have risen by similar percentages to the index, which seems to make more sense against this backdrop.