Emerging Stocks Are Flashing a 2008 Financial Crisis Signal
- MSCI EM metric trailing P/E falls below forward ratio
- Earnings estimates fall faster than actual profits at firms
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An equity valuations signal suggests things are about to get a lot worse for emerging-market investors before getting better.
The price-earnings ratio of the benchmark MSCI Emerging Markets Index, based on trailing 12-month profits, has fallen below its price-earnings ratio based on estimated earnings for the next 12 months, showing that analysts expect earnings to fall faster in the future than currently.