The ASX rout is pricing in much more than any global shock

Friday, 26 October 2018

It’s pricing in a local bust. The S&P500 has corrected 7.8% from the peak. The ASX200 has dropped 11%. Add the AUD and the difference is much larger at -11% versus -5.5% (numbers are up to this morning):

Why?

One reason is Aussie stocks are more expensive given relative earnings growth:

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.