Chart of the Week - Equity Valuation… reset?

Callum Thomas

Topdown Charts

Global Equity PE10 Valuations: So there’s a few things that stand out on this chart of PE10 valuations. Perhaps the most obvious is the USA line, which sees US equities still tracking at historically high levels (despite dropping from 44x 10-year trailing average earnings, down to 37x). But US equities don’t just look elevated vs their own history, in fact the US PE10 is still 2.1x. and 2.4x respectively the PE10 for Developed ex-US and Emerging Markets.

Aside from the obvious, a little more subtle is the reasonably decent drop in the Developed Markets ex-US (DM Ex-US) line from 21.8x to 17.5x, which takes it into very close proximity with emerging markets (which meanwhile haven’t really moved all that much just yet). So as noted in the weekly report there does not appear to be any stand out amazing opportunities as there were in March 2020, but the relative levels and movements are very interesting (US expensive vs history and the rest, while developed has seen the biggest improvement in relative valuations so far).


Key point: No big absolute value opportunities yet, but clear relative value.


Callum Thomas
Head of Research
Topdown Charts

Callum is Head of Research at Topdown Charts. Topdown Charts is a chart-driven macro research house covering global Asset Allocation and Economics.

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