Valuation – PE10 Ratio USA vs. Rest of the World Investors aiming for long-term growth beyond the U.S. equity market may find emerging markets and non-U.S. developed markets compelling due to their valuations, robust growth prospects, and diversification benefits. Image: Topdown Charts
MSCI World Sector/Style Valuations Elevated P/E ratios in most MSCI World sectors—when compared to historical averages—indicate strong investor optimism fueled by positive earnings expectations and favorable macroeconomic conditions. Image: Goldman Sachs Global Investment Research
Indexed Return of Cyclicals vs. Defensives and Consensus Forward 4-Quarter U.S. GDP Growth The relative performance of cyclicals compared to defensives reflects market expectations of substantial real U.S. GDP growth. Image: Goldman Sachs Global Investment Research
S&P 500 Earnings Revision Breadth The S&P 500 earnings revision breadth soaring highlights broad-based optimism, stronger-than-expected earnings results, and upward revisions pushing the index to record levels. Image: Goldman Sachs Global Investment Research
Valuations – Spread of S&P 500 Minus S&P 500 Equal Weight The significant valuation gaps between the cap-weighted and equal-weighted S&P 500 result from the high valuations and growth expectations of large companies, which emphasize market concentration and investment risks. Image: Bloomberg
S&P 500 Forward Earnings Estimates The earnings fundamentals for the S&P 500 provide a solid foundation for a cautiously optimistic market outlook heading into 2026, with accelerating growth expected to drive further gains in equities. Image: Real Investment Advice
Average Post Election Year for S&P 500 The S&P 500 has modestly declined for four days, reflecting typical post-election uncertainty. Historically, US stocks usually bottom by late October in post-election years, before rallying into year-end. Image: Carson Investment Research
VIX Seasonality At this time of year, volatility usually rises, driven by a mix of market expectations, macroeconomic data, and seasonal investor behavior. Image: Topdown Charts
Median S&P 500 Stock Short Interest as % of Market Capitalization Although short interest in the S&P 500 has risen sharply in recent months—indicating increased investor caution—it does not currently signal widespread bearishness or panic. Image: Goldman Sachs Global Investment Research
Typical Path of S&P 500 Bottom-Up Consensus EPS Estimate While positive earnings revisions have been strong recently, this momentum is likely to slow, though it probably won’t fall below the usual historical trend of downward revisions. Image: Goldman Sachs Global Investment Research
Deviation of Earnings Above/Below Long Term Growth Trend The unusually high divergence of current earnings from their long-term growth trend often precedes significant market corrections or reversals, suggesting that investors face elevated risks despite prevailing optimism. Image: Real Investment Advice