At the aggregate level, it is difficult to call US equities cheap, concedes Neil Birrell - before going on to argue they are not that expensive either and earnings growth is making them cheaper
With the broad US equity market and the technology-heavy NASDAQ indices hitting all-time highs, Microsoft surpassing a market capitalisation of $1 trillion (£770m) on the back of excellent first-quarter results and Amazon smashing all earnings expectations over the quarter as well, US equities are not exactly cheap - but they are not that expensive either. Equities are trading on a price/earnings (P/E) ratio of around 17.5x this year's earnings and just over 15.5x next year with earnings forecast to grow over 11.5% in 2020. Those P/E ratios are a little above the long-run average but not...
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