European stocks trade at over 40% discount versus the US stock market, the biggest in at least 35 YEARS!
This comes as Europe's forward P/E ratio is ~13x, way below the S&P 500 P/E of 22x. Europe has rarely been so cheap on a relative basis. This is also valid on a sector-adjusted basis. Source: Goldman Sachs, Global Markets Investor, Datastream
Openai's valuation in context
Source: Chartr
Nvidia $NVDA carried the S&P 500 $SPX in 2024
The AI leader drove 22% of the index’s total gains. Apple $AAPL, Amazon $AMZN, and Meta $META added another 19% combined. Broadcom $AVGO chipped in nearly 5%. These 5 companies powered almost half of the index's 2024 returns. Source: Carbon Finance
Interesting observation from GMO thru Callum Thomas:
"Since 1957, the 10 largest stocks in the S&P 500 have underperformed an equal-weighted index of the remaining 490 stocks by 2.4% per year. But the last decade has been a very notable departure from that trend, with the largest 10 outperforming by a massive 4.9% per year on average.“ It’s rare and bubbly for the top stocks to outperform like this! Source: Thomas Callum, GMO
WALL STREET ANALYSTS' S&P 500 MEDIAN TARGET FOR 2025 IS 6,600
Wall Street expects a 12% increase in the S&P 500 in 2025. As shown by blue bars, Wall Street always projects positive years. This is despite declines in 2000-2002, the 2008 Financial Crisis or 2022. Source: Global Markets Investor, Bloomberg
Don't try to time the market:
Source: LPL research through Brian Feroldi
$SPX is expected to report Y/Y earnings growth of 11.9% for Q4 2024, which is below the estimate of 14.5% on September 30
Source: Factset
Global Equity Returns in 2024...
Source: Charlie Bilello
