MSCI EAFE index P / S multiplier (white) and S&P 500 (in blue). Source: Bloomberg
The stock market in Europe and Asia lagged behind the S&P 500 by three years: about two weeks ago, the P / S * multiple of the MSCI EAFE ** stock index exceeded 1.5 for the first time since 1995, according to Bloomberg data. In addition, this figure also exceeded the peak of the beginning of the century (December 1999) in the area of 1.35.
*ProFinance.ru: ratio of market capitalization to annual revenues
**ProFinance.ru: includes large and mid-cap companies from 21 developed countries (Europe, Australia, Asia and the Far East, excluding the United States and Canada)
However, the P / S multiple of the MSCI EAFE Index lagged far behind that of the S&P 500. After the global financial crisis of 2008-2009, the P / S multiple of the US stock market grew much faster than the MSCI EAFE Index, which allowed it to exceed the March 2000 high of 2.36 three years ago.