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Chart of the Week - Global vs US Corporate Earnings

Global vs US Corporate Earnings: On the topic of US vs global equities, a key reason for the extended trend of US beating global equities has been the long-term cycles in relative strength of *earnings*.

The chart below shows that US earnings have outgrown global peers substantially over the past decade. Interestingly enough it follows a previous decade of global earnings outgrowing US earnings.

Basically this lens presents a glimpse of the fundamental trends underpinning the price trends that have been fairly extensively documented.

Thus one takeaway is that this long-term cycle in fundamentals will need to turn in order to reinforce any turn in price. But also of significance is value: I would argue that the superior profitability and earnings growth of US companies is already in the price - and then some. So there is some nuance to this puzzle…

chart of global vs US corporate earnings

Key point: US corporate earnings have outgrown global peers over the past decade.

NOTE: this post first appeared on our NEW Substack:

Best regards,

Callum Thomas

Head of Research and Founder of Topdown Charts

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