GS Asia Bear Market Risk Indicator – Recession Risk The GS Asia Bear Market Risk Indicator rose to 75% in August. Bear market risk is rising. Picture source: Goldman Sachs Global Investment Research
S&P 500 Equity Risk Premium and Global DM Composite PMI Nice chart showing that the equity risk premium of the S&P 500 is currently elevated. Picture source: JDI research
S&P 500 Gap Risk The S&P 500 Index is subject to significant gap risks under the Presidency of Donald Trump. Picture source: Hayek and Keynes
CS Global Risk Appetite Index The Credit Suisse Global Risk Appetite Index falls, but is not at panic level. Picture source: Credit Suisse
Fed Dovish Pivot – Stimulus Hopes Support Risk Appetite Growth sentiment appears to be stabilizing, due to optimism about fiscal policy. Picture source: Goldman Sachs Global Investment Research
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
Survey: What Is The Most Effective Risk-Off Hedge? In the latest BofA Merrill Lynch edition of the FX and rates sentiment survey, a majority of respondents preferred 10-year Treasuries as the most effective risk-off hedge. Only 6% of respondents chose gold and the yen. Picture source: BofA Merrill Lynch
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
U.S. Recession Risk Indicators An inverted yield curve and gloomy confidence expectations generally do not bode well. Picture source: Oxford Economics, Macrobond
Risk Parity Funds Currently, risk parity equity allocations are near the top of the historical range. Picture source: Deutsche Bank Global Research
