In One Chart: Why U.S. stocks are right where they ought to be — in one chart

Do you think stocks are out of whack?

Deutsche Bank strategist Jim Reid does not feel that way, and he has pointed to recent global manufacturing data as proof that the recent stock climb isn’t overheated.

Below is his chart showing purchasing managers’ indexes from around the globe, and where those PMIs suggest each nation or region’s stock market should be sitting. The chart also shows the actual year-over-year gains for each stock market.

“The PMIs across the key markets suggest equities should be approximately 10-20% higher than a year ago. This is pretty much where they are, with some regional variations,” Reid wrote in a report dated Thursday.

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