By almost any measure stocks are pricey relative to history. We’ll save the theoretical debate about whether such high valuations are justified for another post, and will instead illustrate with charts just how far valuations have come over the last five years. The Shiller P/E just made a new cycle high in December of 27.1x.
While negative five-year yields in Germany and Switzerland has been a feature for some time, Japanese yields have up until now resisted the temptation to go negative. Today, however, the Japanese 6-year yield crossed the line into the realm of negative yields.
With earnings season on the horizon, we thought we’d take a quick tour of estimates around the globe. Positive revisions to sales and earnings estimates in developed countries have hovered around 20% to 25%, respectively, over one-, three-, and six-month time periods.
IMF data released earlier this week revealed the largest ever quarterly decline in reserves held in euros.
As one measure of market volatility, we calculate the cumulative number of stocks in the MSCI World Index that open at least 2% higher (or lower) than the previous close over a 65-day time period. Extremes in the number of gaps often occur in conjunction with inflection points in the market.