Shareholder Return vs. Free Cash Flow Thanks to low interest rates, shareholder return has exceeded free cash flow levels again. U.S. companies cannot spend more than they earn indefinitely. Picture source: Goldman Sachs Global Investment Research
MSCI ACWI Total Return Index – Rallies and Corrections Interesting chart showing the deviation of the MSCI AC World Total Return Index against its trend line, like the swing of a pendulum. Picture source: Fidelity Investments
Risk-Adjusted Returns Across the Treasury Strips Curve The distribution of strong returns across the Treasury curve has become very tight. Historically, this marks the beginning of the end. Picture source: Arbor Research & Trading LLC
U.S. Misery Index and Average Forward Returns The U.S. misery index (core inflation + unemployment) is approaching all-time low, because both inflation and unemployment are very low. Historically, average forward returns have been higher than the overall S&P 500 average.
S&P 500 Total Return and U.S. High Yield/High Grade Usually, flight to quality in credit markets is rarely a good sign for equities, but ECB QE, Fed easing and repo operations should be positive. Picture source: BofA Merrill Lynch
S&P 500 Return – Longest Bull Markets Ever Chart showing the longest equity bull markets ever. October 9, 2019 was the bottom in 2002 and peak in 2007. Picture source: Ryan Detrick, LPL Financial LLC
U.S. ISM Recovery and Returns: Recession vs. No Recession After a recession, U.S. equities tend to perform well during ISM recoveries. Picture source: Goldman Sachs Global Investment Research
U.S. ISM Contraction and Returns: Recession vs. No Recession If there is no recession, U.S. equities tend to perform well during ISM contractions. Picture source: Goldman Sachs Global Investment Research
Returns Driven by Central Banks? This chart suggests that equity and credit markets are no longer driven by fundamentals, at the moment. Picture source: Deutsche Bank Global Research
High-Yield Bond Returns Year-to-date, Caa rated high-yield bond returns have lagged those with higher average credit ratings. Picture source: Charles Schwab
