Among developed countries, only the Australian, Canadian and Japanese equity markets are selling at multiples at or below their last 10-year range. All other DC equity markets are at their highs.
On the other hand, several emerging countries equity markets are attractively priced relative to their last 10-year range…
…but EC EPS are falling hard. European investors are praying for higher EPS while US investors are hoping EPS hang on.
Recessions are the primary causes for equity bear markets…but recessions seldom just happen…(note that extreme valuation was present in 1987 contrary to what JPM believes).
There is also intra-year declines:
That said, one may think that record M&A activity is a sign that corporations are in good shape and feeling good about the future. Maybe, but that does not make better investors:
And the IPO market has become treacherous:
Even on their own shares, corporate officers and directors tend to buy high:
And if you think you should follow the big boys who have the truth, check this last chart. I will not bother to indicate the market’s high and low points, you can figure them out yourselves.
Just like Joe Public:
The only positive is that neither the hedgies nor the public are currently bullish . They just don’t know.
Lastly, from the horse’s mouth :
Careful out there! (Charts above from JPM, Meb Faber, RBC Capital, The Economist, BAML, Bespoke Investment)