Global P/E Ratios

As shown in the table and charts below, the trailing and forward P/E ratios of the S&P 500 and Nasdaq are high compared to the valuations of other markets in other countries.  While it has historically had high valuations, the Nasdaq's current trailing and forward P/E ranks highest among 12 other country indices, including China's Shanghai Composite.  The S&P 500's trailing 12-month P/E ranks 3rd, although it is in the middle of the pack when looking at forward estimates.  The lowest P/Es are currently in Europe.  Valuations in the US are higher because earnings haven't slowed as much in foreign markets and price declines in the US have been less extreme, even though we're the root cause of the global market selloff.

 

Comments

[nick gogerty]

hey how about a plot of Earnings Yield over historical Equity risk premiums? That would be interesting to see.

I did the US awhile back. Dow 8,800?

http://nickgogerty.typepad.com/designing_better_futures/2008/03/hype-is-highpe.html