This week's chart comes from Lochlan Halloway's weekly insights to Morningstar subscribers. 

The report shows that local markets are on of the most richly priced across Morningstar's global coverage list, even surpassing the US.

Lochlan advises investors that it is not a call to divest from the Australian market. The valuations are skewed heavily by a few expensive companies, including the major banks and market darlings such as Wesfarmers and Goodman Group. There's still opportunities to be found. Five of the largest 20 stocks on the ASX are currently trading below fair value. 

He provides context to today's markets. The equity research databased that we have holds 15 years of ratings for ASX-listed stocks. During this time, we’ve seen all sorts of markets: a mining boom and bust, the rise of Trump, the US-China trade war, a war in Europe, a pandemic, an inflation surge, and so on. In short, we’ve got a reasonable sample against which to benchmark today’s market. Lochlan has plotted the aggregate price/fair value ratio for the ASX 200 over the last 10 years. 

Today's market isn't completely unprecedented - we saw similar frothy markets post-pandemic period.

The rest of the report focuses on what valuations suggest about future returns, and is available to Morningstar Investor subscribers. 

You're able to find an up to date valuation for each market under our coverage in our Markets Centre.

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