U.S. High Yield Credit Spreads Tight high-yield spreads signal strong market confidence, but they also raise red flags by potentially masking underlying vulnerabilities and feeding investor complacency by making risks seem less significant than they are. Image: Topdown Charts
AAII Investor Sentiment Bull Minus Bear Spread The AAII bull-bear spread points to a balanced mood among U.S. retail investors who expect stock prices to decline in the near term—a condition that could set the stage for a sharper move in either direction. Image: Deutsche Bank Asset Allocation
S&P 500 Ratio to Its 200-DMA and AAII Investor Sentiment Bull Minus Bear Spread Historically, very low investor sentiment has not only signaled caution but also suggested further upside in U.S. equities, offering opportunities for contrarian investors. Image: Deutsche Bank Asset Allocation
Valuations – Spread of S&P 500 Minus S&P 500 Equal Weight The significant valuation gaps between the cap-weighted and equal-weighted S&P 500 result from the high valuations and growth expectations of large companies, which emphasize market concentration and investment risks. Image: Bloomberg
U.S. High Yield Credit Spreads and Recessions U.S. high-yield credit spreads in May 2025 show little evidence of recession fears, remaining well below the levels seen during previous downturns. Image: Deutsche Bank
S&P 500 and Treasury Bond to Corporate BB High Yield Spread Widening credit spreads often signal upcoming declines in the S&P 500, serving as a valuable leading indicator of equity market stress because they typically react early to shifts in market sentiment and risk. Image: Real Investment Advice
Median S&P 500 Stock Bid-Ask Spread Bid-ask spreads for S&P 500 stocks have widened significantly in recent trading sessions, driven by heightened market volatility and liquidity strains. Image: Goldman Sachs Global Investment Research
Junk and Investment Grade Credit Spreads Corporate bond yield spreads are often used as a gauge of financial market stress. They can provide insights into the likelihood of an economic downturn, but they are not foolproof predictors. Image: Real Investment Advice
U.S. High Yield Credit Spreads vs. VIX High-yield credit spreads have widened by over 150bps from their 17-year lows, signaling growing financial stress. While rising credit spreads have often been a precursor to recessions, they can sometimes lead to false signals. Image: Topdown Charts
Performance – Spread Between Quarterly Percentage Gains in S&P 500 Value and Growth Indexes Value stocks have significantly outperformed growth stocks in the first quarter of 2025. The upcoming earnings reports will play a pivotal role in determining whether this trend will persist or if growth stocks will reclaim their leadership. Image: Bloomberg
Real 10-Year Return – Spread: S&P 500 – Treasuries Over the past decade, investors have reaped substantial rewards from equities, as stocks have significantly outperformed bonds. However, the outlook for the next ten years indicates that this trend may not persist. Image: Topdown Charts