Past Yield Curve Inversions Preceded Top in Stocks by About 11 Months In the 12 months following an inversion of the yield curve, the S&P 500 return averaged about 10%. Picture source: Bloomberg
Valuation Gap Between High and Low Dividend Yield Stocks This chart shows that the valuation gap between high and low dividend yield stocks is almost the widest ever. Picture source: Goldman Sachs Global Investment Research
Are Small Cap Stocks Overvalued? Small Cap Stocks Valuation: based on the forward PE ratio, the valuation of small cap stocks seems reasonable, with no sign of bubble. You may also like our “Stock Market Valuation.” Picture source: Bianco Research
Stocks, Bonds, Bills, and Inflation since 1926 Great chart showing the hypothetical value of $1 invested in stocks, bonds, and bills, at the beginning of 1926. Warren Buffett is right when he says that stocks are generally better than bonds. Picture souce: Morningstar
S&P 500 Low Volatility Stocks Are the Best Performing Asset YTD This chart shows that S&P 500 low volatility stocks are the best performing asset year-to-date (outside of GSCI energy). Actually, high-quality stocks are a good way to protect against a weak economy. Picture source: Goldman Sachs Global Investment Research
Trailing 12-month Return Differential between U.S. and non-U.S. Stocks Not so long ago, international stocks led the way over U.S. stocks. They could beat US stocks over next decade. Picture source: Vanguard
Could European Stocks Outperform U.S. Stocks? This chart shows U.S. vs. European stocks at 70-year highs. Keep in mind that investors think that the euro area economy is less resilient than the U.S. economy in the event of a shock. Currently, the euro area economy is more impacted by the global slowdown than the U.S.…
Cyclical Stocks Responding to Steepening Long-term Yield Curve Keep in mind that the Fed has little influence on the long end of the yield curve. And currently, the 30-year Treasury rate minus 10-year Treasury rate spread has a normal upward slope, like in the mid-1990s when the economy was growing. The chart below shows that the…
Times When Precious Metals Stocks Surged While Oil Plunged This chart shows that precious metals stocks surged while oil plunged, only three other times in recent history. Picture source: Crescat Capital LLC
Lower Returns for Stocks in the Next 12 Months? Morgan Stanley’s cyclical indicator is flagging “downturn.” The yield curve’s slope, debt issuance, consumer confidence, economic and financial markets data are aggregated in Morgan Stanley’s cyclical indicator. The entry into the “downturn” phase suggests lower returns for stocks and risky assets in the next 12 months. Picture…
