Equity Risk Premium

Equity Risk Premium The equity risk premium (earnings yield less bond yield) stands at 4.48% (the 90th percentile since 1985). It suggests that equities are cheap relative to bonds. Picture source: Fidelity Investments

Liquidity in U.S. Equity Futures

Liquidity in U.S. Equity Futures Liquidity in U.S. equity futures collapsed in early 2018. It has remained at very low levels. Keep in mind that the lack of liquidity could lead to violent market moves. Picture source: Deutsche Bank

S&P 500 Valuation and Equity Risk Premium

S&P 500 Valuation and Equity Risk Premium This chart shows that the equity risk premium (earnings yield less 10-year Treasury yield) has reached 4.5%, as it was at the December low. Picture source: Fidelity Investments

Equity Volatility vs. Equity Allocation

Equity Volatility vs. Equity Allocation As equity volatility rises (inverted on the chart), equity allocations come down. You may alos like “The Yield Curve Leads VIX (Volatility) by Three Years.” Picture Source: Deutsche Bank

Active Equity Managers Still Underperform

Active Equity Managers Still Underperform This chart shows the low percentage of active funds that outperformed and how difficult it really is to beat the market over time. You may also like “The Rise of Passive Investing.” Picture source: PIMCO

The Equity Risk Premium May Be Bullish

The Equity Risk Premium May Be Bullish The equity risk premium suggests that the S&P 500 is not overvalued, which may be a bullish signal. You may also like our “Stock Market Equity Risk Premium.” Picture source: Fidelity Management and Research

Equity Market Driven by Bonds Not Profits

Equity Market Driven by Bonds Not Profits The chart shows a widening gap between cyclicals and bond proxies. It is clearly a cyclical bear market within a bull market, as during the dotcom bubble. Picture source: Societe Generale Asset Research