Global Equity Risk Premia

Global Equity Risk Premia
Monday, March 25, 2024
The US equity risk premium is the lowest since 2003. You still have to go to the emerging markets to earn any premium, but even that is getting harder. Everyone wanted the markets to broaden out, and they have: risk premia are shrinking everywhere.
Global Equity Risk Premia
Monday, January 22, 2024
With the S&P 500 making a new all-time high (ex-dividends) on Friday for the first time in over two years, it seemed like a good idea to check its valuation relative to other world markets. Well... based on the equity risk premium, it's the most overvalued market in the world, almost twice as much so as number two, the Netherlands. But then again it has been for most of the last two years, and also among the best performing, so... 
Global Equity Risk Premia
Monday, November 6, 2023
The US equity risk premium is by far the least attractive in the world -- at least judging by the S&P 500. Midcap is in the middle of pack, and smallcap is among the world's best (without going into countries with a lot of regime risk, such as China and Turkey).  And with this edition, we add detailed coverage for Australia and the Netherlands (at the request of clients -- we live to serve). 
Global Equity Risk Premia
Monday, August 7, 2023
This is getting ridiculous. The US equity risk premium is the narrowest in the world, but it's not just because of high bond yields. It's also just a matter of equity valuation, pure and simple, with the US forward PE the highest in the world. But that's just the S&P 500. Small-cap and mid-cap universes are very normally valued.
Global Equity Risk Premia
Monday, June 19, 2023
In ERP terms, large-cap US equities are the worst value in the world (energy is the one value sector). But the US small-cap sector is value-competitive on the global stage. It's not about growth versus value -- it's size.
Global Equity Risk Premia
Tuesday, April 18, 2023
The US continues to offer the least-favorable premium for bearing equity risk in the world, with the ERP even lower than the low associated with the November FOMC. But that's not the same thing as saying that stocks aren't attractive -- after all, since then, and even with a narrower ERP now, the S&P is up 9.1%.
Global Equity Risk Premia
Tuesday, January 3, 2023
At the start of a new year, the equity risk premium makes US stocks the most overvalued in the world (at least relative to US bonds). But you're not going to like where you have to go for value -- Russia, China, Taiwan (places where you have to actually bear some risk).
Global Equity Risk Premia
Monday, September 12, 2022
The US ERP is the least attractive in the world (and it has been all year).
Global Equity Risk Premia
Tuesday, April 19, 2022
In the US, it's not a question of growth versus value (both are expensive). It's that mid-cap and small-cap are cheap versus large-cap.
Global Equity Risk Premia
Monday, March 7, 2022
It's suddenly a whole new world for global risk premia. Russia vaults to the very top of the league tables, with the European nations not far behind. Caution: the earnings downgrades are just beginning, especially in Russia.

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