🏛 Schroders Equity Lens July 2026: Stretched Valuations, Broadening Earnings
Schroders' monthly guide to global equity markets puts the forward 12-month P/E for global stocks at 20.3x, above both the 5-year (19.9x) and 10-year (19.0x) averages, meaning the bull case now hinges on earnings delivery. Analysts expect roughly 24.5% year-on-year EPS growth in 2026, accelerating to 27.0% in Q3 and staying strong at 24.6% in Q4. Market leadership is broadening well beyond the flat-through-June 'Magnificent Seven': US small caps gained 23%, Japan 16%, and emerging markets 24%, with EM earnings forecast to grow over 60% in 2026 versus 24% in the US. For investors, that's a signal to diversify away from mega-cap tech concentration toward regions and sectors with cheaper valuations and faster earnings momentum.
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