Valuation – S&P 500 Real Value Index Since 1871, the S&P 500 real total returns, dividends reinvested, have averaged 6.9% a year. The U.S. Real Value Index has always mean-reverted — and right now, it is between 10% and 20% above fair value. Image: TS Lombard
Valuations – Market Values as a Proportion of World GDP Global equities have tripled their weight since the 1990s, jumping from 75% to above 200% of world GDP—an expansion that screams just how far valuations have run. Honestly, what could go wrong? Image: Goldman Sachs Global Investment Research
Largest Company in Terms of Market Value in the S&P 500 in Each Year Since 1955 The market’s biggest players usually cluster in the sector riding the economic zeitgeist—and right now, that’s tech. It’s where innovation happens, growth speeds up, and investors chase the next breakout story. Image: Goldman Sachs Global Investment Research
U.S. Corporate Equities Market Value Outstanding vs. Monetary Base vs. Nominal GDP Quantitative easing expands the monetary base, alongside a rising federal deficit, a combination that usually boosts financial asset prices but delivers mixed and modest impacts on overall economic growth. Image: TS Lombard
Announced Share Buybacks in the U.S. The ongoing pipeline of stock repurchase programs demonstrates strong confidence among executives and continues to underpin the U.S. stock market through 2025 and beyond. Image: Bloomberg
Performance – Value vs. Growth The U.S. market is experiencing outperformance in growth sectors driven by innovation and strong earnings, whereas value sectors dominate outside the U.S. due to slower earnings growth and differing economic dynamics. Image: Goldman Sachs Global Investment Research
10-Year U.S. Treasury Yield Fair Value The fair value model for the 10-year U.S. Treasury yield, based on market variables, suggests a fair value close to 3.9%. Image: Deutsche Bank
After-Tax Nonfinancial Corporate Profits as Share of Gross Value Added While U.S. corporate profits fell in Q1 2025 due to higher costs and economic uncertainty, they remain historically high, reflecting both the strength and the vulnerability of large companies in the current economic climate. Image: Bloomberg
U.S. Dollar DXY Index Deviation from PPP Fair Value and Subsequent 10-Year Annualized Return By most measures, the U.S. dollar remains overvalued-even after its recent declines-and appears poised for a secular decline. Image: Bloomberg
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
DXY U.S. Dollar Index vs. Nasdaq Composite / MSCI World Value Over the past two years, U.S. growth stocks—known for their sensitivity to currency fluctuations—have exhibited a strong correlation with the U.S. dollar. Image: Gavekal, Macrobond