Author: isabelnet

S&P 500 Index A softer-than-expected PPI reading sent the U.S. stock market to a new record high yesterday, increasing bets on a Fed rate cut next week. Image: Bloomberg

S&P 500 – U.S. Broad Market Net Forward Profit Margin Elevated profit margins in the U.S. broad market, which continue to show forward-looking expansion, point to underlying economic resilience and do not align with the start of a severe, systemic labor market downturn. Image: TS Lombard

Top 10 Mega Cap Stocks as % of S&P 500 The growing dominance of the top 10 companies in the S&P 500 has raised concerns about whether the index still provides sufficient diversification, given the concentration risks and sector imbalances. Image: Real Investment Advice

Median S&P 500 Performance After Fed Cuts Rates The S&P 500 has typically risen by a median of roughly 50% in the two years after the Fed begins cutting rates. However, when cuts take place during recessions, returns are usually much weaker. Image: Deutsche Bank

Valuation – 12-Month Forward P/E Ranges (MSCI Regions) Elevated valuations in U.S. and global equity markets rest mainly on bullish earnings expectations, led by tech and AI companies benefiting from robust revenue growth, solid profitability, and widening adoption. Image: Goldman Sachs Global Investment Research

Probability of S&P 500 Drawdown The risk of a drawdown in the S&P 500 has risen recently, fueled by low market volatility, slowing economic growth, and ongoing concerns over tariffs and rising inflation later this year. Image: Goldman Sachs Global Investment Research

Consensus Capex Growth Estimates Beginning in Q4 2025 and continuing into 2026, hyperscaler AI companies are expected to see a sharp deceleration in capex growth, which could pressure valuation multiples. Image: Goldman Sachs Global Investment Research

Sentiment – Risk Appetite and Expected U.S. Equity Market Performance In September, U.S. equity investors have grown more risk-averse as political uncertainty and stretched valuations dominate concerns, even as recession risks ease and expectations for monetary easing rise. Image: S&P Global Market Intelligence

Amount of Fed Rate Cuts Priced by End of Year The outlook could shift quickly in response to upcoming inflation data and changing economic conditions, but for now traders are pricing in 67 basis points of easing by the end of 2025. Image: Bloomberg

Valuation – S&P 500 Forward P/E Multiple The five largest S&P 500 stocks are trading well above their historical valuation norms—reflecting strong investor confidence in their earnings power and growth prospects—yet their valuations remain below previous peak levels. Image: Goldman Sachs Global Investment Research

Change in Consensus EPS Earnings growth and estimate revisions for the broader S&P 493 are more subdued compared with the strength and optimism around the Magnificent Seven. Image: Goldman Sachs Global Investment Research