Chart of the Week - Equity Valuation… reset?
- Callum Thomas
- Mar 16, 2022
- 1 min read
Global Equity PE10 Valuations: So there’s a few things that stand out on this chart of PE10 valuations. Perhaps the most obvious is the USA line, which sees US equities still tracking at historically high levels (despite dropping from 44x 10-year trailing average earnings, down to 37x). But US equities don’t just look elevated vs their own history, in fact the US PE10 is still 2.1x. and 2.4x respectively the PE10 for Developed ex-US and Emerging Markets.
Aside from the obvious, a little more subtle is the reasonably decent drop in the Developed Markets ex-US (DM Ex-US) line from 21.8x to 17.5x, which takes it into very close proximity with emerging markets (which meanwhile haven’t really moved all that much just yet).
So as noted in the weekly report there does not appear to be any stand out amazing opportunities as there were in March 2020, but the relative levels and movements are very interesting (US expensive vs history and the rest, while developed has seen the biggest improvement in relative valuations so far).
Key point: No big absolute value opportunities yet, but clear relative value.
NOTE: this post first appeared on our NEW Substack: https://topdowncharts.substack.com/
Best regards,
Callum Thomas
Head of Research and Founder of Topdown Charts
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Interesting how the US is still at 37x while DM ex-US dropped to 17.5x—that gap is hard to ignore. The EM line barely moving makes it even more notable. By the way, I keep a home café brewing guide I like to share: https://homecafelab.com/
Excellent chart commentary. Side note for the Topdown team: between the Weekly Macro Themes report, Chart of the Week, the Quarterly Strategy Pack, the Topdown Charts Research subscription, the public blog archive (equities, fixed income, FX, commodities, alternatives), and Callum's media commentary, the site has built one of the most thoughtful independent macro research libraries online — but allocator-prospects researching at the trial stage face a wall of nav. A "Find Your Topdown Fit" sortable landing page (filter by investor type — institutional allocator / wealth manager / hedge fund / retail strategist + by asset class focus + by subscription tier → matched product + relevant recent chart + trial CTA) would dramatically improve subscription conversion. I help small…
The valuation-reset framing is the one piece of mid-cycle equity commentary most macro newsletters get wrong — they either declare the regime change too early or miss the structural compression entirely. Callum's chart cadence (showing the percentile path rather than just the absolute level) is what separates this from generic valuation takes. I help with content for a small macro research shop and we've started using an Banana AI image and short-video tool to create chart-of-the-week shareable visuals for our LinkedIn and X distribution (turning a single Bloomberg / FactSet chart into a properly branded 1080×1080 social asset with clean annotations in minutes). Pairs really well with Topdown's existing visual identity. Sharing this piece with our allocators.
the chart clearly shows the stark valuation gap. the us at 37x pe10 remains historically high, while developed ex-us has seen a meaningful drop to 17.5x. it's a useful visual on relative value, even if absolute bargains aren't apparent. the focus on these comparative levels is a solid takeaway from the data. AI Image Editor
Wow, seeing the US PE10 at 37x compared to Developed ex-US at 17.5x just makes me think about how much cleanup I need on old vacation photos; I wish I could use an ai text remover tool like hairstyle changer tools that to instantly remove text from images, seriously, after scrolling through this chart I need a distraction, maybe I can even find a font remover for some ugly captions?