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
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.
Global Equity Risk Premia
Monday, February 7, 2022
Worldwide, Turkey, Russia, Italy and Taiwan offer the best values (the US offers the second worst). Within the US, small-cap is on sale, while large cap growth is more than fully valued. Energy is the most attractive sector, tech the least.
Global Equity Risk Premia
Monday, August 2, 2021
Risk premia have widened everywhere over the last quarter, pretty much in lockstep. The US had the narrowest-versus-mean before, and it still does.
Global Equity Risk Premia
Thursday, April 15, 2021
The US ERP, halfway down to the pre-GFC mean, makes US stocks the least attractive in the world. There are lots of opportunities to play catch-up in Europe and Asia.
Global Equity Risk Premia
Monday, January 11, 2021
Equity risk premia are contracting everywhere. In the US, the S&P 500's is within 8 bp of the tightest since the Great Financial Crisis.
Global Equity Risk Premia
Monday, November 9, 2020
ERP's are pretty normal everywhere in the world, except for Europe which halfway to repeating the tragic mistake of lockdowns.