U.S. Stock Market Bull and Bear Indicator – S&P 500 Two Fridays ago, our Stock Market Bull & Bear Indicator was bullish well before the opening bell, and the S&P 500 followed through, ending the day up 0.62%. Using multiple financial data, this great model helps investors navigate through different market conditions. It suggests whether…
S&P 500 CAPE Ratio vs. Subsequent 10 Year Annualized Real Return The S&P 500 is now sitting at a Shiller CAPE level that has only shown up during the market’s priciest episodes. History points to real annualized returns in the -3.8% to -1.4% range over the next 10 years. Image: Real Investment Advice
Percent of S&P 500 Stocks with Dividends > 10-Year Treasury Yield The income trade has flipped. In July 2016, 63.4% of S&P 500 stocks yielded more than the 10-year Treasury. Today, fewer than 4% do, leaving Treasuries with a higher current yield than almost every blue-chip stock. Image: Ned Davis Research
Valuations – S&P 500 Sector Forward P/E Energy remains the market’s valuation laggard, while Industrials, Healthcare and Consumer Staples are already priced for a lot of optimism. Image: The Daily Shot
Fear & Greed Index – Investor Sentiment The Fear & Greed Index stands at 53, pointing to neutral sentiment. Investors are willing to take on risk, but enthusiasm is still measured, leaving room for stocks to climb if sentiment brightens. Image: Cable News Network
Large Cap Healthcare Positioning Large-cap healthcare positioning sits at the 55th percentile, just above neutral and far from crowded, leaving room for buyers to add. Image: Deutsche Bank Asset Allocation
G7 Budget Deficits, Share of GDP The U.S. is running by far the largest budget deficit among G7 economies when measured relative to GDP, and projections show little improvement over the next few years. Image: Gavekal, Macrobond
S&P 500 Earnings Revisions vs. U.S. PMIs The U.S. macro picture remains solid for now, reinforcing the optimism spreading across Wall Street. Image: Topdown Charts
AAII Sentiment Survey U.S. retail investors are still playing defense, with the AAII bull‑bear spread slipping deeper into negative territory. History suggests this kind of pessimism often sets the stage for the next rally in stocks. Image: The Daily Chartbook
Share of Global Market Capitalization The U.S. accounts for just 4% of the world’s population, but it commands 63% of global equity value. Its innovation engine keeps pulling in foreign capital. Global markets, as ever, still move to an American beat. Image: Goldman Sachs Global Investment Research
U.S. 10s30s and 20Y to 30Y Buybacks Buybacks are starting to look like fiscal QE, with the Treasury flooding the system with short‑term debt to fund the deficit. The problem is that rising yields are draining that liquidity almost as fast as it arrives. Image: Bloomberg