This page shows equity earnings and valuations for the major regions. On the left, we can see that outside of the US earnings expectations are rolling over. This has coincided with price declines such that valuations - measure by forward PE ratios - are now a little below the average of recent decades in many regions.

How have equities performed over the long term? This chart looks at the S&P 500 going back to 1900. Over the long run, equities tend to rise, driven by economic growth. This uptrend is punctuated by economic setbacks with the key events highlighted in the chart.

This page focusses on US S&P earnings. The left-hand side chart shows that the gains seen in US equities since the financial crisis have been well supported by a strong increase in expectations of earnings per share. The grey bars in right-hand side chart show the expectation of earnings made by analysts at the start of each year compared to the eventual outturns (green bars). On average, analysts have a tendency to overestimate future earnings. Earnings in 2018 were significantly boosted by the US tax reform.