Is this a buyer's market or what?
Look at Russia; although most folks aren't interested (but should be) Russia is not only off by -64.5%, its valuations have compressed to 4.3 times trailing earnings. China stocks are down -64.3% is fetching 14.55 times trailing earnings. India stocksĀ are down -48.1% andĀ priced at 10.7 times. Canada's TSX 60 is down 29.4% and PE has contracted to 10.9 times earnings.
Oddly, US Stocks, down -36.4% year-to-date, have experienced a slight expansion in P/E from 20.11 times to 20.54 times. Hmmm? Does this suggest that there is more downside in US stocks, given that there has been no compression in valuation? Tunisia, Bahrain, and Switzerland are the only countries out of 84 to join the US in this phenomenon of rising P/E. For the US, itĀ appearsĀ thatĀ earnings have gone down in lockstep with the stock market, perhaps more than stock prices themselves.
For those countries whose P/E ratios have gone down the most in this tumultuous year-to-date, high P/E compression suggests relatively strong earnings fundamentals versus very poor technical considerations.
Only three countries, Ghana, Tunisia, and Ecuador,Ā out of 84, have had positive results this year.
BelowĀ are the comparisons of China stocks vs. US stocks, and China P/E vs US P/E. China's market has had a much larger correction than the S&P 500, but look at the valuations. Chinese stocks are now far less expensive than US stocks. China's earnings are in tact, while its stock market has been liquidatedĀ as a result ofĀ deleveraging.
Charts: Bespoke Investment Group
