With another quarter of Chart Attack sent to inboxes (you can sign up to the free email list for Chart Attack here), we want to take some time to highlight some charts that jump out at us compared to the prior quarter.

Twelve-Month Forward P/E vs. Average P/E

This chart shows a pronounced increase in the P/E ratio for markets across the board. Not only is the overvaluation stark in most cases, but it happened fairly quickly. One way could be to view this as simply overvalued. Another viewpoint could be that forward earnings estimates are too low and the markets have moved higher in anticipation of those estimates moving higher. 

10-Year Canadian Treasury Yield Vs. TSX Dividend Yield

Just when you thought interest rates could not go lower, the ten-year yield does just that, hitting 1.32%. Contrast this with the TSX yield at roughly 2.74%. The TSX composite yield is at the lower end of the range we typically see historically, but relative to treasury yields hitting lows, this is not an unreasonable shift in our view.

Canada Headline CPI

While there has been a lot of talk about inflation in the last few months, the CPI numbers continue to be below historical averages and do not really seem like they are about to start to trend higher anytime soon. We thought this was an interesting chart simply due to the contrast with higher-level fears around inflation we hear.

House Price to Income and Rent

It is no surprise to Canadians that real estate is expensive. New Zealand is the only other country that rivals our real estate markets. Perhaps more concerning, however, is that house price to rent has recently taken a clear ‘lead’ against New Zealand getting to a bit of a league of its own at this stage.

There are handfuls more charts for readers to dig into, but we felt that this above group might be of particular interest to those who download the latest Chart Attack.

Did You Miss the Latest Chart Attack?

We recently sent out the latest edition of the free Chart Attack e-mail highlighting various hard-to-find charts on a quarterly basis. If you are not yet on the list, you can join for free here and view the charts.


Best wishes for your investing!

The 5i research Team