U.S. Stock Market – Earnings and Valuation

U.S. Stock Market – Earnings and Valuation The valuation is high relative to history, but not near historical extremes. The U.S. stock market should remain under pressure until Q3 earnings season. Picture source: Fidelity Investments

Valuation – U.S. Stock Market Capitalization-to-GDP

Valuation – U.S. Stock Market Capitalization-to-GDP The U.S. stock market capitalization-to-GDP is a general gauge of market valuation, but it’s not very useful for short-term market timing. Picture source: Bloomberg

How Does A First Rate Cut Affect the Stock Market?

How Does A First Rate Cut Affect the Stock Market? Since 1970, the first rate cut has been bullish for the S&P 500 for the next 12 months, with recession and no recession. Picture source: Fidelity Management and Research

Stock Market Capitalization as a Percentage of Nominal GDP

Stock Market Capitalization as a Percentage of Nominal GDP This ratio is useful in determining whether the U.S. stock market is undervalued or overvalued relative to its historical average. The current reading is pretty high at 149.15%. You may also like the “Stock Market Valuation” and “S&P 500 Index – Earnings & Valuation.” Picture source: Bianco Research

Is The U.S. Stock Market Overvalued?

Is The U.S. Stock Market Overvalued? S&P 500 Valuation: the chart shows that the U.S. stock market is not cheap. Based on the forward P/E ratio, the S&P 500 is not extremely overvalued either. You may also like our “Stock Market Valuation.” Picture source: Bianco Research

The Stock Market’s Central Trend

The Stock Market’s Central Trend The chart shows that the S&P 500 is only 10% above its long-term trend since 1871. Picture source: Fidelity Investments

U.S. Stock Market Annualized Returns since 1872

U.S. Stock Market Annualized Returns since 1872 You may notice as the timeframes get longer, the frequency of losses rapidly decreases. During 1872 to 2018, there were no 20-year rolling periods with stock market losses. Picture source: Visual Capitalism