The S&P is in the top 10% of historical P/E ratios on prior earnings while the U.S. economy is in the worst 10% of economic situations, arguably the worst 1%.

Judge as of the 2020 statement date (mid-2020). Part 1: the S&P 500 trailing-twelve-month P/E ('prior earnings') sat in the top 10% of its historical distribution, for example in Shiller's long-run data. Part 2: US economic conditions (GDP contraction, unemployment) sat in the worst 10% of historical US experience. The hedged 'arguably worst 1%' is not required. True: both parts hold. Mostly true: both broadly hold, with one marginally outside its decile (for example, P/E in the top 12%). Mixed: one part holds and the other clearly does not. Mostly false: both parts are overstated but contain some truth. False: both parts are clearly wrong.

Set before the research began.

1. E1 Assessing Recent Stock Market Valuation with Macro Data Federal Reserve Bank of San Francisco (Economic Letter 2020-31) · 13 October 2020

   “At the end of the third quarter of 2020, the CAPE ratio stood at 30.9. This value is below the prior peak of 32.6 in the third quarter of 2018, but it is about 51% above the long-term average of 20.5 from 1960 to present.”

2. E2 U.S. Election Chart of the Week – S&P 500 P/E Ratio | Lipper Alpha Insight | LSEG Lipper Alpha Insight (LSEG) · 20 October 2020

   “In the graph above, the latest P/E ratio in August reads 30.6x, which is well above the prior 10-year average of 26.2x and historical long-term average of 17.1x, marking stocks as ‘expensive’.”

3. E3 [PDF] Understanding the Second-Quarter Fall in GDP - Congress.gov Congressional Research Service (CRS INSIGHT IN11478) · 10 August 2020

   “On July 31, the U.S. Department of Commerce’s Bureau of Economic Analysis (BEA) released estimates that the economy, as measured by gross domestic product (GDP), contracted at an annual rate of 32.9% in the second quarter of 2020 compared to the preceding quarter.”

4. E4 What Is a Recession? NBER Definition + Live 2026 Dashboard whatisarecession.com (third-party explainer) · 27 March 2026

   “The post-WWII maximum was 14.8% in April 2020 (BLS, as revised; first published as 14.7%), brief, and 10.8% in late 1982 after the Volcker recession, more sustained.”

The evidence shows a record second-quarter 2020 GDP contraction [E3] and the post-WWII peak in unemployment [E4], supporting the economic part of the claim. It shows S&P 500 valuations well above long-run averages [E1][E2] but gives no percentile, and E1 places the CAPE below its 2018 peak, so it does not establish that the P/E was in the top 10% of its historical distribution as the criteria require.