2024 so far has been the S&P 500's (^GSPC) year, hitting record high after record high above 5,000. The tech sector has been an integral factor in this growth, but as Magnificent Seven leaders begin to lag, Wall Street is waiting with bated breath for the market rally to broaden.

Deutsche Bank Chief Global Strategist Binky Chadha explains where he sees market valuations fitting into the narrative of desired broadening market rallies.

"Just think about the S&P 500 multiple going back 100 years, and you see that it generally remains between 10 and 20," Chadha explains to Yahoo Finance. "You look at the times we were above 20, which is where we are today, and you will notice that most of the time when we're about 20, outside of the late 1990s, was when we were having a cyclical recovery."

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Luke Carberry Mogan.

Video Transcript

JOSH LIPTON: And Binky, I want to get your take on another subject, which is a source of debate which is just valuation Binky, get your take. How you're thinking about valuation for the market? And also Binky whether it really matters for returns in the near to intermediate term.

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BINKY CHADHA: So what I would say is, first of all, we're valuations, I would characterize valuations at the market level as basically being pretty full. I would argue that they're not necessarily extreme or hugely overvalued. What I would keep in mind is basically that just think about the S&P 500 multiple going back 100 years. And you see that it basically generally remains between 10 and 20.

And then you look at the times that we were above 20 which is where we are today. And you will notice that most of the time when we went above 20 outside of the late 1990s was when we were having a cyclical recovery. So for example, coming out of a recession. So that's just simply saying that the market's pricing in basically some recovery going forward. So valuations are pretty full in the sense that at 22 or 23 times earnings.

The market is pricing in a good 10, 15% earnings growth. Now our forecast happens to be around 10%. So that's why I say valuations are pretty full. But they're not extreme. In terms of when valuations matter, it's really a function of the catalyst rather than valuation by itself being a driver, especially at these levels, which are way below where we were in the '90s, for example.