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
The Conference Board Leading Economic Index (LEI) for the U.S. The U.S. Leading Economic Index (LEI) declined by 0.1% in July, suggesting some economic weakening ahead. Image: The Conference Board
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
Equities – Global Valuation Range While the U.S.–non-U.S. valuation gap is unusually wide, non-U.S. valuations remain close to their historical norms. As a result, international markets offer comparatively better value than the U.S., despite not being historically cheap. Image: Goldman Sachs Global Investment Research
Fed Funds Rate Target The current fed funds rate aligns with economic policy rules, maintaining stability without urging aggressive cuts. A potential 25 basis point cut falls within the lower range, but substantial rate cuts are not strongly justified. Image: Deutsche Bank