Sensitivity of S&P 500 to U.S. 10-Year Treasury Yield and Equity Risk Premium (ERP) The 4700 year-end target for the S&P 500 index assumes ERP of 4.8% and U.S. Treasury yield at 1.6%. Image: Goldman Sachs Global Investment Research
Commodities Rolling 10-Year Annualized Returns Historically, commodity bull markets tend to last for years. Image: BofA Global Investment Strategy
Small Cap Stocks – Relationship Between Relative Fwd P/E of Russell 2000 vs. Russell 1000 and Subsequent 10-Year Annualized Relative Returns Could small caps outperform large caps over the next 10 years? Image: BofA US Equity & Quant Strategy
Growth Stocks – One-Year Correlation: 10-Year US Treasury Yield/MSCI Value Index vs. 10-Year US Treasury Yield/MSCI Growth Index U.S growth stocks are currently highly correlated with U.S. bond yields, as they were during the dotcom bubble. Image: Morgan Stanley Wealth Management
Equity Risk Premium – 12-Month Forward Earnings Yield Minus Real 10-Year Government Bond Yield The Equity Risk Premium has increased over the last few months. Image: BCA Research
Inflation Expectations – U.S. 10-Year TIPS Breakeven So far, the U.S. 10-year TIPS breakeven continues to follow the historical pattern after global recoveries. Image: Arbor Research & Trading LLC
S&P 500 Annualized Forward 10-Year Returns (Forecast vs. Actual) The current S&P 500 valuation suggests that equity investors should expect negative annualized returns over the next 10 years. Image: BofA Global Research
U.S. 10-Year Yields and U.S. Dollar – Reaction to Global Recoveries Since 1970 So far, the U.S. 10-year yield and the U.S. dollar continue to follow the historical pattern after global recoveries. Image: Arbor Research & Trading LLC
Consensus U.S. 10-Year Bond Yield Forecast The consensus forecast for U.S. 10-year bond yields is 1.9% by year-end. Image: BofA Global Investment Strategy
Stocks – Global Cyclical Relative to Defensive Sectors vs. U.S. 10-Year Yields Is now the time for defensive stocks? Image: Longview Economics