Prospects for U.S. Equities Remain Bleak
Consensus earnings expectations seem too high considering the strong market headwinds and advanced nature of the earnings cycle, while valuations remain elevated.
Authored by: Celia Dallas
Are Earnings Poised to Disappoint?
While there is some cause for cautious optimism on earnings, earnings growth is cyclically stretched and more likely to decrease than continue to rise. Consensus expectations for profit margins and earnings expectations set a high bogey.
European Equities Getting Pricey
Normalized P/E ratios that adjust for earnings cyclicality suggest that these markets are quite a bit more expensive than do standard P/E metrics.
Characteristics of High-Yield U.K. Equities
U.K. charities that must operate under income-only spending policies should actively monitor and manage the potential biases a high dividend yield strategy may introduce.
European Equities Soar, but Remain Modestly Attractive
Valuations remain reasonable and upside potential outweighs downside risks.
Energy Exposure: Too Much? Too Little? Too Late?
Investors’ allocations to energy-related assets have increased significantly. Given that energy commodities are overvalued, should we be concerned?
U.K. Equity Valuations
U.K. equity valuation metrics provide mixed signals, but suggest that the market is close to fair value unless one assumes a rather dramatic decline in earnings just over the horizon.
U.S. Equities Are Cheaper, but Fewer Values Remain
With valuations more concentrated, style and market cap should be weaker drivers of return.
European Markets are Moderately Attractive
Do lowered earnings growth projections adequately account for increasing headwinds?
U.S. Equity Valuations: Improving But Not Enough
Using normalized earnings to value U.S. equities suggests they remain overvalued.