Barclays examines how CAPE ratios behaved across major global equity markets during COVID-19 and what that implies for future returns. Despite economic disruption, equities rebounded sharply, raising valuation concerns, yet low rates pushed excess CAPE yields near historic highs, suggesting equities may still appear attractive relative to bonds.
CAPE And The COVID-19 Pandemic Effect
Barclays
Robert Shiller
Research
18 Pages
Key Takeaways
US Valuation Premium: US CAPE rose above its long-term average while other regions remained at or below historical norms, highlighting a relative valuation gap across 5 major markets.
Excess Yield Expansion: Excess CAPE yield reached near all-time highs as 10-year rates fell toward 0%, making equities comparatively more attractive despite elevated valuations.
Sector Recovery Leaders: Technology, healthcare, and communication services drove the rebound, accounting for a majority of gains during the post-pandemic recovery phase across regions.
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