Sensitivity of S&P 500 to U.S. 10-Year Treasury Yield and Equity Risk Premium (ERP) The 4700 year-end target for the S&P 500 index assumes ERP of 4.8% and U.S. Treasury yield at 1.6%. Image: Goldman Sachs Global Investment Research
Equity Risk Premium – 12-Month Forward Earnings Yield Minus Real 10-Year Government Bond Yield The Equity Risk Premium has increased over the last few months. Image: BCA Research
S&P 500 Equity Risk Premium – Consensus Bottoms Up Earnings Yield – 10-Year Treasury Yield The S&P 500 Equity Risk Premium has increased over the last few months. Image: Morgan Stanley Research
S&P 500 Equity Risk Premium and Yield Gap U.S. equities remain attractively valued relative to bonds. Image: Goldman Sachs Global Investment Research
S&P 500 Equity Risk Premium and Real 10-Year Rates Will the S&P 500 equity risk premium rise further? Image: Morgan Stanley Research
Valuation – FY2 P/E Premium of Growth vs. Value The valuation spread between Growth and Value is still well above its long-term average. Image: Goldman Sachs Global Investment Research
S&P 500 Valuation – Blended P/E Ratio and Equity Risk Premium Should investors take a cautious approach to U.S. equities as the S&P 500’s P/E ratio remains elevated? Are investors compensated enough for the risk of owning U.S. equities rather than bonds? Image: Topdown Charts
24-Month Fwd Sector-Adjusted P/E Premium (Discount) to U.S. Equities Is the U.S. stock market still the best place to invest? Image: Goldman Sachs Global Investment Research
European Stocks – MSCI Europe Index Two-Year Forward P/E Premium to MSCI All Country Worl Index European stocks remain cheap relative to their global peers. Image: Morgan Stanley Wealth Management
S&P 500 Equity Risk Premium (Using Breakevens) The S&P 500 equity risk premium remains much lower than it was in March 2020. Is a drawdown on the horizon? Image: Morgan Stanley Research