Tech Stocks – G3 Central Bank Balance Sheet vs. Nasdaq 100 Will the divergence between central bank liquidity and tech stock performance continue through 2024? Image: BofA Global Investment Strategy
Liquidity Policies and Central Bank Balance Sheets Central banks have barely decreased the amount of QE stock, suggesting a deliberate and measured strategy in scaling back economic support. Image: BofA Global Investment Strategy
Cumulative Growth of Fed Balance Sheet and S&P 500 Index Cumulative Growth The expansion of the Fed’s balance sheet tends to have a positive impact on the S&P 500 Index, suggesting a correlation between the two (R² = 0.8832 since 2009). Image: Real Investment Advice
Fed Balance Sheet Expansion/Contraction vs. S&P 500 The contraction of the Fed’s balance sheet tends to be a headwind for the S&P 500, as reduced liquidity in the financial system may have negative implications for equity markets. Image: Real Investment Advice
Global Central Bank Balance Sheets The ongoing trend of central banks purchasing global debt since 2008, will depend on dynamic economic conditions, inflationary forces, and the specific monetary policy goals of each individual central bank. Image: Real Investment Advice
G10 Central Bank Balance Sheets The shrinking of G10 central bank balance sheets is a significant factor that can impact liquidity and potentially act as a headwind for equities. Image: Deutsche Bank
Fed Balance Sheet The shrinking of the Federal Reserve’s balance sheet can have an impact on liquidity and potentially act as a headwind for U.S. equities. Image: BofA Global Investment Strategy
U.S. Federal Debt and Federal Reserve Balance Sheet Are the Federal Reserve balance sheet and the U.S. federal debt on the way to the moon? Image: Real Investment Advice
Aggregate G6 Central Bank Balance Sheet The aggregate G6 central bank balance sheet is expected to continue decreasing in 2024 and 2025 as central banks unwind their pandemic-era asset purchase programs through quantitative tightening measures. Image: BofA Global Research
G5 Central Banks Balance Sheet vs. Nominal GDP Growth Shrinking global excess liquidity tends to be a headwind for equity markets. Image: J.P. Morgan