Valuation – S&P 500 Price/Earnings Ratio The S&P 500 P/E multiple is expected to remain above the average level observed since 1990, indicating investors’ willingness to pay more for earnings, possibly due to optimism about future growth. Image: Goldman Sachs Global Investment Research
S&P 500 Performance After >40% of the Components Make a 14-Day RSI >70 When more than 40% of S&P 500 components hit a 14-day RSI above 70, the S&P 500 index tends to perform strongly in the following 12 months, with an average 25.7% increase in value seen a year later since 1972. Image: Carson…
Cumulative Global Fund Flows Investors are showing less enthusiasm for equity funds. In contrast, flows into global bond and cash funds remain very strong, reflecting a prevailing investor sentiment towards these two asset classes. Image: Goldman Sachs Global Investment Research
U.S. Core CPI Minus Unemployement Rate % vs. Fed Funds Rate The Fed rarely cuts rates when core CPI exceeds the unemployment rate, reflecting the central bank’s concern about potential inflationary pressures in the economy and its emphasis on price stability. Image: BofA Global Investment Strategy
U.S. Federal Debt Held by the Public The projected ballooning of the U.S. federal debt by 2050 could have negative impacts on the U.S. economy, with more interest payments, limited resources, and potential constraints on growth and government responsiveness. Image: BofA Global Investment Strategy
Stocks vs. Bonds – Relative Allocations U.S. stocks are relatively expensive compared to bonds. Are investors too aggressively positioned in U.S. stocks relative to bonds? Image: Topdown Charts
S&P 500 Seasonality Analyzing historical trends can provide investors and traders with valuable insights, as it helps to understand the S&P 500’s past performance in the fourth quarter. Image: Goldman Sachs
Dow Jones Performance After the First New High After More Than a Year Without a New High Historically, when the Dow Jones has reached new highs following a period of more than a year without achieving such levels, it has seen a significant increase in value of around 14% a year later. Image: Carson Investment…
Fed Balance Sheet Expansion/Contraction vs. S&P 500 The contraction of the Fed’s balance sheet tends to be a headwind for the S&P 500, as reduced liquidity in the financial system may have negative implications for equity markets. Image: Real Investment Advice
FY2 P/E Multiple of S&P 500 Top and Bottom Valuation Quintiles The valuation gap between high and low valuation U.S. stocks remains elevated, presenting potential opportunities for value investors. Image: Goldman Sachs Global Investment Research
Flexible and Sticky Inflation Flexible inflation (core goods) has fallen significantly and sticky inflation (core services) is still declining, which is good news as it suggests a moderation in the inflation rate. Image: Federal Reserve Bank of St. Louis