Every month, I calculate the US equity markets valuation. There is little data on Europe, but someone sent me a Morgan Stanley Document with a slew of data on European market valuations.
Ignoring all the noise about the troika, haircuts, insurance policy; almost all the quantitve indicators indicate a very cheap Europena market. The numbers are as of October 3rd, 2011 (markets are up ~10% in the US and Europe since then). I a going to do some comps to US market valuation on that date. The numbers in the chart below are based on Morgan Stanley numbers for MSCI/Europe, and my own calculations. I also broke up the numbers for the UK, Germany and France. Overall it seems the market valuations are far cheaper in Europe than the US.
Below is a table, which I put together (European wide numbers exclude financial co.s, country specific numbers include them).
The ExodusPoint Partners International Fund returned 0.36% for May, bringing its year-to-date return to 3.31% in a year that's been particularly challenging for most hedge funds, pushing many into the red. Macroeconomic factors continued to weigh on the market, resulting in significant intra-month volatility for May, although risk assets generally ended the month flat. Macro Read More
Full document can be found below, and a chart of the Shiller Pe for France and Germany.
Morgan Stanley Market Valuations//
Updated on
Thanks for the tip, valuationstatistics for Europe can be hard to find.
The Swedish stock exchange has more cyklical companies then US (I estimate that cyklical sectors answer for 61 respective 44%). This could be one reason for the valuationdifference. If one would base PE on multiple years, including 2008 and 2009, swedish companies probably wouldnt look as cheap.
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