Sentiment – Risk Appetite and Expected U.S. Equity Market Performance U.S. equity investors’ risk appetite has declined in July, marking a shift towards net risk aversion not seen since January. Investors have also grown increasingly pessimistic about the prospects for near-term returns. Image: S&P Global Market Intelligence
Equity Market Concentration – Market Capitalization of 10 Largest Companies as Share of S&P 500 Total The S&P 500’s high concentration in the top 10 stocks, surpassing dotcom bubble levels, raises concerns about diversification and market stability, as underperformance in these stocks could lead to potential risks. Image: BofA US Equity & Quant Strategy
Ownership Breakdown of the U.S. Equity Market (Share of Corporate Equity Market) U.S. households hold the largest share of the equity market, reflecting confidence in stocks. However, ownership is very concentrated, with the wealthiest 10% owning about 93% of all U.S. stocks held by households. Image: Goldman Sachs Global Investment Research
Valuation – U.S. Equity Market Capitalization to GDP The U.S. equity market cap to GDP ratio is near an all-time high at approximately 187%, suggesting a significant overvaluation of the U.S. stock market. Image: Goldman Sachs Global Investment Research
Do You Believe the Risk of an Equity Market Correction at Some Point Over the Next 3-6 Months Is High or Low? JPMorgan’s survey reveals that 82% of their clients anticipate a high likelihood of an equity market correction within the next 3-6 months. Image: J.P. Morgan
When Do You Expect the U.S. Equity Market Will Peak? 77% of financial advisors believe the bull market will continue beyond 2024, as they expect stellar corporate results, easy financial conditions, and lower interest rates to support its continuation. Image: BofA US Equity & Quant Strategy
Gold – Beta of USD/xxx to Equity Market Volatility Related to Government Spending Gold has been a very good hedge against debt ceiling worries in the past. Image: Deutsche Bank
Equity Market Volatility Related to Uncertainty over Government Spending Equity market volatility may spike when the debt ceiling is under discussion. Image: Deutsche Bank
Money Market Fund Assets as a Percent of S&P 500 Market Capitalization Cash on the sidelines is not elevated relative to the S&P 500 market capitalization. Image: Morgan Stanley Wealth Management
Total Equity Market Capitalization per Country The United States has the largest equity market capitalization in the world (over $41 trillion as of December 31, 2022). Image: Goldman Sachs Global Investment Research