Relative Valuation & Dalio’s Big Short

Check out the accompanying pdf and chart collection. Executive Summary: Around the world, as inflation concerns, interest rates, and recession fears have risen, stock market valuations have fallen. They’ll fall further if recessions actually materialize. Against this backdrop, we examine how the valuations of various indexes have fared relative to one another. … Also: For Europe, recession appears particularly likely given a brewing energy crisis, as Russia has been choking off natural gas supplies. Melissa assesses the ramifications for European households and businesses. … And: The ECB’s hawkish turn has hurt most EMU MSCI sectors’ valuations; we take a look at the deterioration relative to analysts’ still-strong earnings and margin expectations.