Monday, 15 November 2021
Our chart-pack contains the most relevant macroeconomic graphs in one place, clearly structured and organized for a wide range of economic and financial market indicators and analytical content. Additionally, we provide regional and country level data as well as international comparisons to allow you to contrast financial and macro indicators across countries.
Take the chart with the US total stock market value divided by nominal GDP. Last month, this alternative valuation metric (also known as the Buffett indicator) surpassed the 200% threshold. Just like most other valuation indicators, it shows that the US stock market can be classified as highly overvalued.
Such readings could indicate that US equities are ‘priced for perfection’ and that the market is becoming increasingly vulnerable to a major correction. All the more so as stock market valuation reverts to its mean over the long run. At the same time, investors should be aware that valuation indicators are not known to be good timing instruments; stock indices can remain undervalued or overvalued for a considerable period of time.
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