Chart of the Week - Relative Value Trinity

TopdownCharts
12-06

Thanks to a 17-year Bear Market, an intriguing set of valuation extremes have opened up …and may well be presenting a major harbinger for global investors in the coming years.

The chart below shows our relative value indicators for small caps vs large caps, value vs growth, and global vs US stocks (presented as a z-score).

All 3 have reached extreme cheap levels, and collectively are at the lowest point since the dot-com bubble. This should be ringing alarm bells due to the parallels to the peak of the dot com bubble — but also providing cause to pause and think about what the next big multi-year investment themes might be.

$.SPX(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ $.IXIC(.IXIC)$ $NASDAQ 100(NDX)$ $Invesco QQQ(QQQ)$ $.DJI(.DJI)$ $GLOBAL X DOW 30® COVERED CALL ETF(DJIA)$

Key point:  Global ex-US/Small/Value are cheap vs US/Large/Growth.

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