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Podcast: All into Account
Episode: Equity Strategy: Equity P/E multiples in historical context - earnings vs bond yield spread is now below 2007 levels
Description: Speaker: Mislav Matejka, CFA, Head of Global Equity Strategy
The bulk of the equity performance so far this year, and indeed in the past 18 months, was driven by multiple expansion. Globally, 12m forward earnings are up only 7% from the lows, in contrast to nearly 30% P/E upmove. 2024 EPS projections are again down small in the US ytd, and are more meaningfully lower in Europe. At the same time, bond yields are higher, squeezing ERPs. Global earnings yield vs bond yield differential has been moving lower, to be now below 2007 levels. Central banks are set to deliver some...