Global corporate earnings dynamics has been improving tremendously. The current year-on-year decline is already "only" -7%, which is significantly better than the 30% decline in the middle of the last year. At the same time, global corporate earnings have risen by 10% since the beginning of this year.
The very good dynamics of global corporate earnings since the beginning of the year meant that although the broadest global equity index MSCI All Country World has gained a very high return of 8.8% since the beginning of the year, the valuation indicator trailing P/E actually slightly fell from 30.7 to the current level of 29.7.
Given that global equity valuations are currently at all-time highs, any further growth of global stock markets will have to be clearly driven by further growth of corporate earnings.
Investment Strategist at Conseq Investment Management, a.s.