Pulais: US stock valuations are high, and other regions may be more attractive for investment
Regarding the outlook for the U.S. and international stock markets, Tim Murray, a capital markets strategist in the multi-asset department at Pruvest, stated that since the global financial crisis from 2008 to 2009, U.S. stock valuations have generally remained high, and the earnings fundamentals are also more robust compared to non-U.S. markets. Relative valuations of U.S. stocks are still on the high side, and it will be challenging to support the premium with future earnings performance. As the market questions the short-term outlook for U.S. stocks, other regions may present more attractive opportunities, especially in areas where valuations are appealing and macroeconomic prospects are improving. The market has raised doubts about the earnings outlook in the U.S., but the environment outside the U.S. (particularly in Europe) is gradually improving. Accelerating economic growth and a more favorable interest rate environment have created favorable conditions for the European banking sector, which has been overlooked by investors for the past two decades. Notably, the MSCI European Banking Index's price-to-book ratio broke above 1 in February for the first time in over seven years, but current valuations of European bank stocks are still far below the general levels seen before the outbreak of the global financial crisis
According to Tim Murray, a capital markets strategist in the multi-asset department of PruLife, regarding the outlook for the U.S. and international stock markets, U.S. stock valuations have generally been high since the global financial crisis of 2008-2009, and the earnings fundamentals are also more robust than those of non-U.S. markets. The relative valuation of U.S. stocks remains high, and it is challenging to support the premium with future earnings performance. As the market questions the short-term outlook for U.S. stocks, other regions may present more attractive opportunities, especially in areas where valuations are appealing and macroeconomic prospects are improving.
The market has raised doubts about the earnings outlook for the U.S., but the environment outside the U.S. (especially in Europe) is gradually improving. Accelerating economic growth and a more favorable interest rate environment have created favorable conditions for the European banking sector, which has been overlooked by investors for the past two decades. Notably, the price-to-book ratio of the MSCI Europe Banks Index broke 1 in February, marking the first time in over seven years, but current valuations of European bank stocks are still far below the general levels seen before the outbreak of the global financial crisis