Volatility Divergence – VIX vs. MOVE The divergence between VIX and MOVE presents unique challenges and opportunities for market participants, reflecting different expectations and perceptions of risk in the equity and bond markets. Image: BofA Global Research
Volatility Divergence – VIX and MOVE The volatility divergence between VIX and MOVE remains elevated. Image: Gavekal, Macrobond
China GDP – Longer-Term Growth Divergence Between China and the Rest of the World The divergence between China and the rest of the world is expecting to increase over time. Image: Deutsche Bank
U.S. Stocks and U.S. Bonds: Returns Following Fund Flow Divergence In 2019, bond fund flows outpaced stock fund flows. The difference is the largest ever recorded ($588bn). Image: BlackRock Investment Institute
Divergence Between the 2-Year U.S. Treasury Yield and the U.S. Dollar Trump wants a weaker US dollar, but could the dollar weaken in the coming months? Image: Legg Mason
Percentage of S&P 500 Stocks Above 200-Day Moving Average The percentage of S&P 500 stocks above their 200-day moving average is showing signs of a bearish divergence, which can be an early warning signal of a potential market correction. Image: BofA Global Research
Valuation – 12-Month Forward P/E Ranges (MSCI Regions) Concerns about long-term sustainability and future market corrections have arisen among market participants due to the divergence between current U.S. stock market valuations and historical averages. Image: Goldman Sachs Global Investment Research
S&P 500 Advance-Decline Line The S&P 500 advance-decline line is a key indicator confirming market trends. A bearish divergence, where it fails to confirm the S&P 500’s new high, signals potential market weakness. Image: BofA Global Research
S&P 500 and the Percentage of Stocks Above 10-Day MAs The rise in the percentage of S&P 500 stocks above their 10-day moving averages can be interpreted as a tactical bullish divergence, providing valuable insights into market strength and the potential for a reversal. Image: BofA Global Research
U.S. Earnings Revision The earnings revision ratio is showing an improving trend for small and large caps, while it is trending down for the Nasdaq 100. This divergence in earnings revisions could reflect changing market dynamics. Image: BofA US Equity & Quant Strategy