Global vs US Corporate Earnings: On the topic of US vs global equities, a key reason for the extended trend of US beating global equities has been the long-term cycles in relative strength of *earnings*.
The chart below shows that US earnings have outgrown global peers substantially over the past decade. Interestingly enough it follows a previous decade of global earnings outgrowing US earnings.
Basically this lens presents a glimpse of the fundamental trends underpinning the price trends that have been fairly extensively documented.
Thus one takeaway is that this long-term cycle in fundamentals will need to turn in order to reinforce any turn in price. But also of significance is value: I would argue that the superior profitability and earnings growth of US companies is already in the price - and then some. So there is some nuance to this puzzle…
Key point: US corporate earnings have outgrown global peers over the past decade.
NOTE: this post first appeared on our NEW Substack: https://topdowncharts.substack.com/
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Callum Thomas
Head of Research and Founder of Topdown Charts
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