Equity, Bond, FX and Oil Volatility Premiums Volatility premiums have significantly declined across asset classes after the U.S. elections. As election results become known, market uncertainty diminishes, leading to lower volatility premiums and increased stability. Image: Deutsche Bank Asset Allocation
ISABELNET Cartoon of the Day While Donald Trump has won the election, the real “winner” appears to be the U.S. deficit, which is set to grow substantially in the coming years. Have a Great Week, Everyone! 😎
S&P 500 Performance by President While the S&P 500 has generally trended upward under both Democratic and Republican administrations, average gains have historically been higher during Democratic presidencies. Image: J.P. Morgan Equity Macro Research
Interest Rates – Fed Funds Futures Curve After the Federal Reserve’s recent meeting, the slope of the fed funds futures curve has increased slightly, indicating a shift in market expectations regarding future interest rate movements. Image: The Daily Shot
CEO Business Confidence Expectations for Economy The current landscape suggests a cautious yet optimistic outlook among CEOs, which could lead to increased economic activity and investment as businesses prepare for potential growth. Image: Goldman Sachs Global Investment Research
VIX Indexed to Election Day Equity implied volatility typically increases leading up to U.S. presidential elections and decreases afterward, mirroring the market’s reaction to political uncertainty and its resolution. Image: Goldman Sachs Global Investment Research
Percentage Change in S&P 500 in Previous Bull Markets The current bull market appears to be in its early stages, with historical data supporting the potential for significant gains in the coming months and years. Image: Bloomberg
Estimated Earnings Impact of 1pp Change in Statutory Tax Rate A one percentage point change in the corporate tax rate can have a measurable impact on U.S. corporate earnings, with small companies often feeling the effects more acutely than their larger counterparts. Image: Goldman Sachs Global Investment Research
Performance Based on Congress Makeup – Average S&P 500 Index Annual Return Historically, a split Congress has frequently led to favorable U.S. stock market performance, as investors often view the reduced policy risk and increased stability of divided government positively. Image: Carson Investment Research
S&P 500 Seasonality From Election Day in November to the end of the year, the S&P 500 index has historically seen a median return of 4%, reflecting a seasonal pattern where investor optimism and holiday spending boost market performance. Image: Goldman Sachs Global Investment Research
S&P 500 Consensus Quarterly Earnings Actual and Consensus Estimates Despite a promising earnings outlook that could sustain market strength, investors would be wise to consider potential risks and already stretched market valuations. Image: Morgan Stanley Research