S&P 500 Stocks and Non-S&P 500 Stocks as a % of U.S. Large Cap Funds AUM Despite the abundance of stocks, the lack of interest in investing beyond the “Magnificent Seven” creates bias, leading to excessive attention and favoritism that may undervalue or neglect other investment opportunities. Image: BofA US Equity & Quant Strategy
Fed Funds Rate and Fed Funds Futures Deutsche Bank expects the Fed to cut rates by 50 bps in June and a cumulative total of 175 bps of rate cuts over the full year 2024. Image: Deutsche Bank
Median Monthly Flow into Equity Mutual Funds and ETFs as a % of Total AUM November has often been characterized by increased investor activity in equity markets, leading to strong equity inflows. Image: Goldman Sachs Global Investment Research
Fed Funds Target Rate Goldman Sachs predicts that by the end of 2024, the federal funds rate will reach 5.1%, which differs significantly from the expectations of the futures market.. Image: Goldman Sachs Global Investment Research
Interest Rates – Fed Funds Futures Curve The Federal Reserve has likely reached a stage where it no longer plans to increase interest rates. This potential pause in rate hikes could have significant implications for various economic factors. Image: The Daily Shot
S&P 500 Index Valuation vs. Fed Funds Rate Given that much of the stock market’s progress this year can be attributed to valuation expansion, it is likely that U.S. stocks will eventually experience a correction to adjust to the impact of higher interest rates. Image: Real Investment Advice
Current Market Pricing for Fed Funds Rate The market is betting that the Federal Reserve may be finished with raising rates. Image: BofA Global Investment Strategy
U.S. Fed Funds Target Rate Federal Reserve tightening cycles historically end with a financial event. Image: BofA Global Investment Strategy
Fed Funds Rate – Target Probabilities at the Fed’s FOMC Meeting Traders see a 6.2% probability of a 25-bps rate hike at the FOMC meeting on November 1, 2023. Image: CME Group
% of Large-Cap Mutual Funds Outperforming their Benchmarks 70% of large-cap mutual funds have underperformed their benchmarks year-to-date, a cause for concern for investors seeking above-average returns from these funds. Image: Goldman Sachs Global Investment Research