Global Market Implied Equity Risk Premiums With equity risk premiums low in the U.S. and Japan, investors earn little extra for taking on stock risk over safer bonds, leaving equities a tougher call and prone to disappointment. Image: Goldman Sachs Global Investment Research
Peak to Trough in the S&P 500 Around Spikes in the Geopolitical Risk Index Most geopolitical shocks haven’t caused lasting market impacts. Oil tends to surge when tensions rise in the Middle East, gold gets a lift, Treasuries draw buyers unless energy prices spiral, and equities typically retreat. Image: Goldman Sachs Global Investment Research
U.S. vs. Rest of World – 12-Month Forward Earnings Per Share U.S. corporate earnings have led the pack in recent years, but overseas profits are finally closing the gap. That momentum shift could mark an important turning point, one that opens opportunities in international large-caps. Image: Deutsche Bank Research
Valuations – S&P 500 P/E vs. U.S. ISM Manufacturing Prices Paid (Leading Indicator) When manufacturing costs climb, equities usually feel it later. Higher input prices work their way into the S&P 500’s P/E ratio with a lag, showing up in valuations roughly a year down the road. Image: Bloomberg
Distributions od Returns of World Tech vs. World ex. TMT The tech sector is undergoing a valuation reset this year, following years of outsized gains driven by AI hype and momentum investing. Over the last half-century, few periods have been as rough for tech stocks in relative terms. Image: Goldman Sachs Global Investment Research
U.S. Yield Curves The yield curve’s normalization following its 2022 inversion eased recession worries for now, but historical patterns still suggest caution post-uninversion. Image: Real Investment Advice
WTI Crude Oil and Recessions When oil prices surge, sometimes doubling, it’s often a red flag for the U.S. economy. History shows these jumps tend to foreshadow recessions, making crude a key gauge for investors watching for signs of a slowdown. Image: Yahoo Finance
Price Performance of Gold Before and After the Start of Armed Conflicts When conflict breaks out in the Middle East, gold typically shines as a tactical safe haven, with prices jumping as traders add a geopolitical risk premium. Image: J.P. Morgan Commodities Research
Effect of a 10% Increase in Oil Prices on Inflation A 10% rise in crude oil prices would add modestly to headline inflation over the year. But if higher prices persist, the inflation effect would linger and growth would take a bigger hit. Image: Goldman Sachs Global Investment Research
Global GS Financial Conditions Index Global financial conditions tightened by 14 basis points, which typically dampens spending and investment by households and firms, especially when triggered by geopolitical shocks like the current Middle East escalation. Image: Goldman Sachs Global Investment Research
Seasonality – S&P 500 Index Average Monthly Returns March and April have a history of treating U.S. stocks well, as seasonal tailwinds lift sentiment. Maybe a dose of spring optimism is making the rounds on trading desks. History, for now, is on the bulls’ side. Image: Carson Investment Research